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Fuel price hike cause for high inflation: Chidamabaram
Publish Date : 12/4/2004 2:11:00 PM   Source : Business News Onlypunjab.com

Union Finance Minister P.Chidamabaram  on
Friday told members of the Lok Sabha that the rise the  wholesale
price  index (WPI) of fuels was the primary factor for  the  high
rate of inflation currently gripping the country.
 
The increase in inflation from 7.1 per cent on October 30 to  7.8
on November six was "mainly contributed by an increase in the WPI
of  fuels  related  group",  Chidamabaram told  the  Lower  House
during Question Hour.
He  also admitted that the inflation rate was still high  at  7.3
per  cent in the later weeks, and added that the  government  was
dealing with this issue on a priority basis.
 
Meanwhile,  the  Union Government today also  announced  that  it
would be phasing out subsidies on LPG and kerosene by March 2007.
 
Petroleum  Secretary  S C Tripathi told delegates  attending  the
Third India-Petro Conference that LPG and kerosene subsidies were
estimated  at  Rs 3,500 crore for 2004-05, and that  it  was  the
government's plan to eliminate it by the next fiscal.
 
Tripathi  also  said  that  a  Bill for  the  setting  up  of  an
independent  regulator for the oil sector would not be  presented
during  the current winter session of Parliament as it  has  been
referred to a Group of Ministers (GoM) for further consultations.
 
The  proposed bill has come in for sharp criticism from  Ministry
of  Chemicals  and  Fertilizers  and  Company  Affairs  Ministry,
particularly on the autonomy of the proposed Board, its powers to
fix   and  regulate  prices  and  its  capability  in   fostering
competition. (ANI with other wire inputs)