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Kerosene, LPG, aviation fuel prices hiked

The Union government today decided to increase the prices of kerosene, liquefied petroleum gas and aviation turbine fuels in a bid to reduce the oil pool account deficit.

Addressing a press conference in New Delhi, Petroleum and Natural Gas Minister Ram Naik said to hike prices of petroleum products was taken at today's meeting of the National Democratic Alliance and that all partners of the NDA had unanimously approved it.

Naik said the ministry had worked out a scheme whereby the subsidy of kerosene would be reduced by Rs 2.50 per litre and that of LPG by Rs 30. Similarly, the prices of aviation fuel will be increased by Rs 2 per litre. He said the price increase were all ex-storage. Before it reaches the consumer sales tax, excise duty, octroi and commission charges would be added.

Naik said that as a result of the hike, kerosene would cost Rs 5.36 per litre in Delhi as against its prevailing price of Rs 2.67 per litre and LPG would cost Rs 196.35 per cylinder In Delhi as against Rs 151.60 now.

He said the government was acting on its decision to abolish the subsidy on petroleum products by March 2002 in a phased manner.

The minister said kerosene currently enjoys a subsidy of Rs 7.83 per litre and LPG is being provided at a subsidy of rs 162 per cylinder. ATF, which used to make some profits, was also under pressure following a sharp rise in the price of crude oil.

Naik said the price rise would come into force from midnight.

He said that the prices of petrol and diesel would not be increased for the time being since they were hiked only last October. The decision to not increase diesel price would help farmers and transporters, he said. However, the government might review the price after four months, he said, adding that, currently, there is a subsidy of nearly Rs 1.43 per liter of diesel.

The minister said a portion of the profits of petrol and ATF would be used to help reduce the subsidy burden on other petroleum products. But in view of the sharp squeezing of profits in the case of ATF, the government has decided to increase the price by Rs two per litre, he said.

At today's cost of crude oil import, the oil pool deficit, going by current imports, would come down to Rs 63 billion as on March 31. Similarly, if crude oil prices remained static during 2000-2001 and the quantity also remains the same, the OPD would be Rs 136.7 billion at the end of March 2001. But, he pointed out, the growth rate in the import of crude oil is around ten per cent per year.

Naik said the prices of crude used to be Rs 3,210 per tonne in February 1999 but is now Rs 8179 per tonne.

Following is the price chart for the kerosene, LPG and ATF in the four metros :

Item	Delhi		Calcutta		Bombay		Madras
	Old	New	Old	New	Old	New	Old	New
Kerosene	2.67	5.46	3.00	5.87	2.75	5.57	2.80	5.64
LPG	151.60	196.35	170.20	221.45	153.20	198.80	155.35	202.25
ATF	14.54	17.19	15.72	18.78	15.35	18.23	15.41	18.44

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