India Inc cheers fuel price hike

8220;CII welcomes the decision to deregulate fuel prices. While this will have some negative impact on the inflation in the short term 8230; the government has shown the ability to implement policy changes even if they are politically difficult,8221; the industry body said.

CII said in the long term,the decision would have a positive impact.

According to FICCI,the government has taken a 8220;very nuanced approach8221; in freeing up petrol prices.

Despite voicing inflationary concerns,the chambers said the move would have a negative impact on the inflation which has reached the double digit. But it would help bring viability in the country8217;s oil economy.

While petrol price will go up by Rs 3.5 a litre and diesel by Rs two a litre,households will have to pay an additional Rs 35 per cylinder for cooking gas. Poor man8217;s cooking fuel kerosene will be dearer by Rs 3 a litre from Friday.

Instead of keeping prices artificially suppressed,it was important to send correct price signals to consumers so that there is no wastage of scarce resources,CII said.

FICCI cautioned fluctuations in global oil prices 8220;can derail the overall economy8221; and asked the government to evolve a mechanism to provide a cushion against the volatility.