NEW DELHI, Aug 20: The United Front steering committee meeting on Thursday is expected to make dramatic announcements on the targeted public distribution system (PDS) and a stalemate on increasing the prices of petroleum products.

The only exception could be a decision on eliminating the subsidy on cooking gas (LPG), which even the left feels is unsustainable at a level of over Rs 70 per cylinder. The Sengupta Committee which went into the whole issue of tackling the oil pool deficit had estimated the LPG subsidy at Rs 77 and suggested a two-stage hike to neutralise it.

There is no support, however, for withdrawing the subsidy of Rs 5 per litre on kerosene and Rs 2 per litre of diesel. The left's thinktanks feel that a tax on diesel-fuelled motor cars could be a solution to reducing the oil pool account, but not a cutback in subsidy.

A tax on luxury cars was, incidentally, a proposal that had featured in both CPI (M) politburo member Sitaram Yechury's treatise on the oil pool account deficit (``Oil pool deficit or cesspool of deceit'') and in the DMK minister of state for petroleum, TR Baalu's proposal to the centre. United Front members like the DMK and the Samajwadi Party have not made any statement for or against an oil price hike so far.

The motley coalition of 13 parties at the centre expects an elaborate presentation tomorrow by the union ministers for finance and petroleum on how they plan to tackle the balooning oil pool account deficit tomorrow. Already, however, there are reservations in many quarters on accepting a hike in oil prices as a solution.

The left parties, which had maintained a studied silence since the last meeting of the coalition partners at the centre, on Wednesday bluntly denied having consented to a price hike. ``The only consensus (at the last SteeringCommittee meeting) was that it (the balooning oil pool account deficit) would be discussed,'' said Communist Party of India (CPI) general secretary AB Bardhan.

Yechury was more categorical in denying support for a price hike to bridge the more than Rs 19,100 crore oil pool account deficit, that is growing by Rs 900 crore a month. ``If they propose a hike in oil prices,'' he said, ``We will oppose it.''

The CPI feels that the centre should first reveal its long-term strategy for the burgeoning deficit in the oil pool before inviting a discussion on short-term measures like a price hike. ``We want to hear first what the finance minister and the petroleum minister have to say,'' said Bardhan.

He said he expected the Centre to ``come out with a whole package,'' on how it proposed to raise oil production and exploration, how it planned to reduce dependence on imports and on curbing consumption. The CPI(M), which had already recommended nine short-term and three long-term alternatives for tackling the oil pool deficit, is not in a mood to discuss a price hike at all.

LPG prices may emerge as an exception, because the left agrees that the subsidy is unsustainable. The huge demand for LPG necessitated immediate investments and the left feels that the centre would do better to invest in LPG bottling capacities than in subsidising consumers.

The oil pool account and oil prices will definitely be discussed both at the core group meeting at the prime minister's residence in the morning and the United Front Steering Committee meeting in the evening for the seventh time in the last three months.

Whether Thursday's meeting would prove more fruitful was, however, anybody's guess. No crystal ball is required to foretell, however, that the proposal to raise the quota and prune down prices of PDS grain for a targeted (read under-privileged) segment of the population, would get the whole-hearted support of all 13 parties at the centre.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.