Hike in petrol, diesel looks imminent

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A hike in petrol and diesel prices and possibly also on LPG looks certain, with the Left leaders agreeing for a marginal increase in prices along with duty cuts to rein in 100 dollars a barrel crude oil price.

The toss is between a Rs 4 a litre hike in petrol and Rs 2 per litre increase in diesel prices, and Rs 2 a litre rise in petrol and Re 1 per litre hike in diesel prices, Government sources said.

The former option is to come with a 2.5 per cent cut in

customs duty on crude oil and petroleum products and a Re one a litre excise duty reduction on petrol and diesel. The latter option, however, is to be coupled with a 5 per cent cut in customs duty on crude oil and petroleum products and a Re one a litre excise duty drop on petrol and diesel.

On domestic LPG, the hike may be in the order of Rs 20 per 14.5-kg cylinder even though the public sector oil firms have been pushing for an increase of Rs 50 per cylinder.

Sources said Petroleum Minister Murli Deora has discussed the issue with key Left leaders including Sitaram Yechury of CPI(M) and Gurudas Dasgupta, who have agreed to a marginal increase in fuel prices.

A Group of Minister headed by External Affairs Minister Pranab Mukherjee will meet on January 17 to discuss the options and make a recommendations to the Cabinet.