India to steer cautiously on fuel price subsidies

India is likely to partly adopt a government panel’s advice to lift price controls on gasoline and diesel fuel. “What is most likely is petrol, because petrol is perceived to be consumed by rich classes. I think second in line would be diesel to some extent, and maybe some token increase, if at all it happens, in LPG and kerosene,” said D.K. Joshi, an economist at ratings agency Crisil in Mumbai. The panel has advised eliminating price controls for gasoline and diesel fuel and an income-linked rise in kerosene and cooking gas prices. Kerosene prices in India have not been revised since 2002 while cooking gas prices were raised in 2008, only to be rolled back after protests from political parties and ordinary people. (February 4, 2010)