EGoM develops cold feet,wont discuss diesel price hike

June 9 meeting for gas pricing only

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It seems that the UPA government has developed cold feet over raising prices of regulated products such as diesel,cooking gas and kerosene as the much-touted meeting of the Empowered Group of Ministers (EGoM) on June 9 is scheduled only to discuss natural gas allocation.

A meeting notice from the Cabinet Secretariat today said that the meet on June 9 was scheduled for EGoM on Gas Pricing and Commercial Utilisation of Natural Gas.

Sources said that the main opposition in taking the political plunge on raising consumer prices of these products,especially diesel,was the current high rate of inflation which could get further aggravated if there was any tinkering.

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Any increase in diesel prices would have a cascading effect on prices of all commodities and the Wholesale Price Index as its contribution in WPI is weighed at 4.67 percent with diesel,LPG and kerosene holding a combined weight of 6.32 percent.

The Indian Express had,on May 26,reported that the government would adopt a wait-and-watch policy before taking a decision on pricing of these products,which is controlled by the government,through the EGoM.

There was no official confirmation from the EGoM chairmans office to freeze that date for the pricing meeting. The EGoM is headed by the finance minister Pranab Mukherjee in the capacity of its chairman.

The meeting,originally scheduled for May 11,has not been notified yet. Meanwhile,the required price increase has come down,except in the case of domestic LPG,from what was estimated early May thereby giving a breather to the government.