End state control on petro prices

On the day a petrol and diesel price hike became effective, the Economic Survey said prices of petrol and diesel should be removed from state control, so that buyers learn to economize on the use of refinery products. For cooking fuels, it suggests limiting the number of subsidized LPG cylinders available in a year to every household to six to eight and phasing out of the kerosene subsidy through use of solar lanterns and cookers by every household that does not have electricity and LPG connections. Just about an hour after the survey document was placed in the Lok Sabha, petroleum minister Murli Deora, in his reply to a discussion on the petroleum price hike, said, “To ensure uninterrupted supply of two products (kerosene and LPG) at subsidized prices, the government is prepared to bear the projected subsidy burden of over Rs3000 billion (US$6.18 billion) in 2009 to 2010.” While suggesting that old fields be opened to the private sector for development, the survey also notes that investment commitment under the new exploration and licensing policy was about $10 billion as on April 1, though the actual expenditure was $4.7 billion. (July 3, 2009)