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Oil firms want to hike LPG, kerosene prices

State-run oil companies have sought the government's permission to raise the prices of domestic cooking gas and kerosene for public distribution system (PDS) in view of the increase in global petroleum costs, the Lok Sabha was informed on Thursday.

"In view of the increase in the international price of LPG and kerosene from March 2002, the domestic oil firms feel that the consumer prices of LPG and PDS kerosene need to be increased," Minister of State for Petroleum and Natural Gas Santosh Gangwar said in a written reply to the Lower House of Parliament in New Delhi.

He said the government was yet to fix a flat rate of subsidy on domestic LPG and PDS kerosene.

"Once the subsidy rates are finalised, the consumer prices of these products would be fixed by the oil companies in line with the prices in the international oil market," he said.

The current retail selling price of domestic LPG at Rs 240.45 per cylinder is estimated to be about Rs 140 per cylinder short of import parity price, while PDS kerosene -- at Rs 8.92 per litre -- is about Rs 4.50 per litre short of import parity price.

In reply to another question, Gangwar said the fluctuations in the international oil market are bound to be reflected in the domestic consumer prices of petroleum products after the dismantling of the administered pricing mechanism from April 1, 2002.

"With a view to partially containing the impact of volatility in the international oil market, the excise duty rates on petrol and diesel were reduced by the government by 2 per cent each recently," he added.

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