Diesel dearer by Rs 5/litre, 6-refill cap on LPG subsidy
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Biting the fuel price hike bullet, the Manmohan Singh government today decided to increase diesel prices by Rs 5 per litre but left kerosene and petrol prices untouched. In a bid to partially plug the subsidy hole owing to cooking gas, the government also decided to limit the number of subsidised gas cylinders to six per household per year. The unsubsidised market rate will add up to Rs 746 per cylinder.
These decisions were taken at a meeting of the Cabinet Committee on Political Affairs (CCPA) this evening. Both Trinamool Congress representative and Railway Minister Mukul Roy as well as DMK representative and Chemicals and Fertilisers Minister M K Alagiri skipped the meeting.
The decision to hike diesel prices came even as a Cabinet meeting tomorrow is set to give the long awaited push to the UPA's reforms agenda by easing FDI norms in civil aviation, power and broadcasting sectors, besides moving proposals to divest equity in seven state-run companies.
Diesel, domestic LPG and PDS kerosene rates have not been changed since June 2011. While the Congress core group cleared the fuel price hike at its meeting last Tuesday, the party also seems to have succeeded in narrowing down differences with allies on its economic policies.
Even as the TMC and DMK skipped the CCPA meeting today, there were indications that the two allies may have agreed not to rock the boat although they would publicly oppose the fuel hike. To this extent, the scope of a partial reduction in diesel prices is not being ruled out.
The Centre is bracing for an attack from the Opposition BJP and Left parties as well as the SP and BSP.
But significantly, the government seems to be finally moving on the reforms and economy front, especially after the battering it has been facing on the coal block allocations controversy.
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