Free fuel pricing,hike LPG by Rs 100,kerosene by 6: panel

Subsequently,the price of kerosene sold through the public distribution system could be raised every year in proportion to the growth in per capita agricultural gross domestic product at nominal price,it said.

The recommended raise by Rs 100 per cylinder in domestic cooking gas was proportioned to the rise in urban per capital income. Thereafter,the price of domestic LPG should be periodically revised based on the increase in paying capacity as reflected in the rising per capita income, it said.

At present,kerosene is sold at a discount of Rs 18.06 a litre and domestic LPG cylinder at Rs 287.59.

Last September,the government constituted the Parikh Committee to suggest reform in pricing of oil-products after sitting on similar reports submitted by the Rangarajan Committee and Chaturvedi Committee.

In its report,the panel has suggested freeing petrol and diesel prices at refinery and retail level. There is no way we can continue with the current pricing policy, said Parikh.

This would not only promote competition but also lead to more equitable sharing of inflation burden,affecting mostly people who can pay. This is a good time to free prices because petrol and diesel prices increases will be very low, Parikh said. You would not wait for crude to touch $120 a barrel again.

At current prices,the deregulation of auto fuels would translate into an increase of Rs 4.72 a litre in petrol and a raise of Rs 2.33 per litre in diesel.

However,Ministry officials said that Deora,who has been opposing any price rise,is likely to modulate these recommendations into a soft-landing approach with a Re 1 increase in diesel and Rs 2 in petrol to curb further inflation.

The immediate hike in LPG could be Rs 25 per cylinder with kerosene witnessing a Re 1 increase with a five per cent cut in PDS allocation of states, the officials said,adding that Parikhs remedies may not be acceptable to the UPA battling high inflation.

Deora gave enough hints that the government will not take any decision in haste,saying the report will be processed and presented to the government in a weeks time.