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Dec 28, 2012, 10.47 AM IST | Source: CNBC-TV18

Expect diesel price-hike in mid-January: Sources

CNBC-TV18's Nayantara Rai, quoting sources, reports that the oil ministry is trying to build consensus for the government to implement the Kelkar Committee's report on fiscal consolidation

CNBC-TV18's  Nayantara Rai, quoting sources, reports that the oil ministry is trying to build consensus for the government to implement the Kelkar Committee's report on fiscal consolidation. The Kelkar report favoured regular hikes and a phased elimination of subsidies.

The price-hike has to include not just diesel, but LPG and kerosene as suggested by the Kelkar Committee report.

Senior officials at the oil ministry have stated that the roadmap for fiscal consolidation and oil subsidies recommended by the Kelkar Committee needs to be implemented. So, the oil ministry is seeking support from other ministries and the government to implement the Kelkar Committee report.

As of now no Cabinet note has been prepared but sources in the oil ministry have indicated that a Cabinet note will be prepared and submit it before the Cabinet Committee on Political Affairs (CCPA) if required.

Sources also indicate that by seeking the implementation of the Kelkar Committee report’s recommendations with the general elections slated for 2014, the government will have the bargaining power to be able to at least try and increase fuel prices as much as it can.

According to sources, diesel price-hike is expected perhaps in mid-January when Parliament will not be convening for at least two three weeks and offers a small window for the government at the moment.

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