New Delhi, Jan 17: The Union cabinet today met take up for consideration the petroleum ministry's proposals to increase diesel, cooking gas and kerosene prices. There is also a proposal to rase the ceiling on number of subsidized LPG cylinders from six to nine.
If approved, the new prices will take effect from midnight Thursday.
“The agenda on petroleum product price rise and the cap on LPG cylinders will be handed out to ministers at the cabinet meeting,” sources said.
The political approval to take the proposals to the cabinet came on Tuesday after Congress leaders decided the LPG cap issue and price increases be sorted out before the party's Chintan Shivir starting Friday in Jaipur and the AICC session on Sunday to avoid the wrath of delegates opposed to the ceiling of six subsidized cylinders per year per household.
The Jaipur session will debate the Congress Working Committee's document detailing the future course of action and pass a declaration to guide the party through this year's assembly elections and Lok Sabha polls in 2014.
Petroleum Minister Veerappa Moily's proposal recommends raising the cap to nine subsidized cylinders with a price increase of Rs 130 per cylinder, or doubling it to 12, provided cylinder prices are raised by Rs 50 every quarter from April 2013 until the entire subsidy is eliminated.
In line with the Kelkar Committee report, it seeks an immediate increase of Rs 4.50 per litre of diesel and a one rupee increase every month thereafter until the under-recovery on diesel is wiped out.
However, it also gives a softer option where diesel price could be raised by 60 paise a month until the under-recovery is eliminated, and its price is deregulated. On kerosene, the increase suggested is either 35 paise a litre each month or one rupee a litre every quarter until March 2015.