FM for collective efforts to deal with rising oil prices

Concerned over the impact of rising oil prices which may go up to USD 150 a barrel on the economy, Finance Minister Pranab Mukherjee today said the Centre, states and political parties would have to collectively develop a mechanism to deal with the situation. "I am suggesting that if we can work out a mechanism through which we can do it, it will be good.  But if the political wisdom of the country as a whole, collectively, can decide that every one of us will have to have a hair-cut, perhaps, we can find out a solution. "Partly, it will be passed on to the consumers, partly, it will be absorbed by the state governments and partly it will be absorbed by the Union Government. But please do not expect us that the Centre would be in a position to compensate it," Mukherjee said in his reply to the debate on Finance Bill in the Lok Sabha.

While petrol prices were freed from government control in 2010, it has to subsidise the oil marketing companies for selling diesel at prices lower than market determined rates. Currently, government provides a subsidy of Rs 14.50 per litre on diesel, Rs 31.88 per litre in the case of kerosene, and in the case of LPG it is Rs 412 per cylinder of 14 kg.