No returning to subsidies on petrol, diesel, says Pradhan

THE GOVERNMENT on Monday ruled out reverting to the system of subsidising auto fuel but said it may resort to cut in excise duties if rate hike “pinches hard” even as there has been Rs 5.21 per litre hike in petrol price and Rs 4.45 in diesel rates since December.

“There will be no subsidy regime in petrol and diesel,” Oil Minister Dharmendra Pradhan said. “Petrol price was deregulated in June 2010 and diesel in October 2014 and the same will continue.”

The surge in international oil prices has led to petrol prices being hiked for the fourth time since December and thrice in case of diesel. Petrol price was hiked by 42 paisa and diesel by Rs 1.03 a litre (excluding local levies), effective last midnight.

Petrol in Delhi now costs Rs 71.14 a litre as against Rs 65.93 in end November. Similarly, diesel rates have gone up from Rs 54.57 a litre to Rs 59.02.

“There will be no going back to subsidisation. Subsidies are anti-poor. Subsidy should be given only to needy persons and not to people who can afford,” he said, indicating that auto fuels are being mostly consumed by people who can afford them. Asked if the government will look at cutting excise duty, he said no developed country had passed on the entire slump in global oil prices to more than a decade low, to consumers.

POLICY SHIFT