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[Lavanay]

Petrol, a fuel used primarily by urban consumers, could soon be selling at market prices. This would mean an increase of Rs 10-16 per litre at current prices.

Officials told ET that a proposal to sell petrol at market prices, while keeping diesel, cooking gas and kerosene at subsidised rates was under consideration. According to a Union minister, some Cabinet members are in favour of market-determined petrol prices. The Cabinet is likely to take up the proposal at a meeting soon, which will discuss a bailout package for state-owned oil marketers.

“With crude oil prices breaching $132/barrel, nothing can be ruled out in the domestic market. Some members in the Cabinet favour prices of petrol to be market-determined, while regulating prices of diesel, cooking gas and PDS kerosene to safeguard the poor and avoid stoking inflation,” he said.

“I strongly believe that subsidising petrol not only encourages its misuse but also discourages use of public transport. Having a market-determined price would help in the survival of oil cos without any significant inflationary impact. The poor, anyway, don’t use personal vehicles,” added another Cabinet minister. He added that there were other members with similar views.