New Delhi:
On Thursday, the Union Cabinet is likely to discuss a Petroleum Ministry proposal for freeing petrol prices from government control and a moderate increase in diesel, cooking gas and kerosene rates. The decision is expected following a meeting between Oil Minister Murli Deora and key UPA allies like Dravida Munnetra Kazhagam (DMK) and Trinamool Congress.
Deora met A Raja, Telecom Minister and senior leader of UPA's key ally, DMK, on Wednesday morning and spoke over phone to Trinamool Congress leader and Railway Minister Mamata Banerjee explaining the "precarious" situation that Public Sector Undertaking(PSU) oil firms would find themselves in, if fuel prices were not hiked.
Sources said that both Raja as well as Banerjee were non-committal on the stand that their parties may take if the proposal of freeing petrol prices - that would lead to a price increase of Rs 4.72 a litre - comes before Cabinet tomorrow.
Already, opposition from key allies has seen Deora drop the proposal on freeing diesel prices that would have resulted in rates going up by Rs 2.33 a litre. However, there is now a move to hike diesel rates by at least Re one a litre.
Deora may, however, bargain for an increase in LPG and kerosene rates although it would not be in the range of the steep Rs 100 per cylinder and Rs 6 a litre hike, respectively, suggested by the Kirit Parikh panel on fuel pricing reforms.
Sources said he may bargain for half of the increases suggested by the panel, but may settle at Rs 25 per cylinder hike in LPG rates and Re one a litre raise in kerosene prices.
The Congress party core group, which includes UPA Chairperson Sonia Gandhi, will meet to vet the proposal before it goes to the Cabinet.