Oil Minister Jaipal Reddy said on Monday that the rates for diesel, domestic LPG and kerosene will remain the same and that the government is not considering a revision of fuel rates for the time being.
"We are not considering hike in prices of diesel, domestic LPG and kerosene. It is out of question right now," Reddy said in a statement according to NDTV.
The announcement was made right after the Oil Minister and the Finance ministry officials held a meeting on inflation and diesel price hikes. Kaushik Basu, India's Chief economic advisor, was also said to be present at the meeting held on Monday afternoon.
"It was only a meeting of the inter-ministerial group to look at the question of inflation. I was requested to come and offer my insights before they finalise their group recommendations," Reddy said according to the Times of India (TOI).
"I focused on the price of diesel and its impact on inflation as a whole. No date has been fixed for EGoM on diesel price deregulation," the minister added.
Government sources said that the Empowered Group of Ministers (EGoM) may likely hold a meeting to discuss LPG and fuel prices on June 1. The ministers group, headed by Finance Minister Pranab Mukherjee, had decided on deregulation of diesel prices in 2010 but had infact never executed the group's decision, according to the NDTV report.
Prospective fuel price hikes can be implemented only with a given consent from the EGoM.
Meanwhile, the Finance Ministry is considering an increase in excise duty on diesel cars. The suggestion was backed by Reddy with the heavy industries ministry disapproving the proposal, NDTV said.
The Kirit Parikh Committee on Energy suggested that an additional excise duty of Rs 80,000 on diesel cars would help counterbalance the excise duty on petrol.
Currently, diesel is sold at a loss of Rs 15.35 a litre. As of now, state-owned oil companies incur a loss of Rs 5.12 billion (512 crore rupees) per day by selling diesel, domestic LPG and kerosene, the TOI said.