Market conditions being favourable, the government has set 2007 as the new deadline for phasing out subsidies on liquefied petroleum gas (LPG) and kerosene sold through the public distribution system (PDS).
"It is the government's stated intention to remove subsidies by 2007 and we are working towards that," Petroleum Secretary S.C. Tripathi said here Friday on the sidelines of a conference.
Pointing to the continuing volatility of crude oil prices, Tripathi, however, said the decision would be influenced by future developments.
Since coming to power in May, the government has raised the price of LPG or cooking gas cylinder by Rs.40 - from Rs.241 to Rs.281.
It had planned to hike the price of the cylinder by five rupees every month to wipe out the subsidy of Rs.135 per cylinder, but the decision was revoked under political pressure.
The price of kerosene has not been raised since last September, with state-owned oil companies and the government bearing a subsidy burden of Rs.7.87 per litre of the domestic fuel sold through the PDS.
-Indo-Asian News Service