Ruling out any immediate hike in prices of LPG and kerosene, Oil Minister Dharmendra Pradhan today said the new government will continue with the policy of subsidising commonly used cooking fuels.
"There will no increase in LPG and kerosene prices for now. We will continue with the extant pricing policy," he said here.
Besides continuing to subsidise LPG and kerosene, the NDA government will also not disrupt the previous UPA government's policy of up to 50 paise a litre increase in diesel price every month.
"The (Narendra) Modi government has come to power riding on hopes of millions of poor and this government will work keeping their interest in mind," he said.
The government heavily subsidises LPG and kerosene. LPG price was last hiked in Jun 2011 when it went up by a steep Rs 50 per 14.2-kg cylinder. Two subsequent increases totalling Rs 14 were on account of increase in commission paid to dealers.
LPG price in Delhi at Rs 414, is Rs 449.17 short of cost.
Price of kerosene, which currently costs Rs 14.96 a litre in Delhi, was last hiked in June 2011 when its price was hiked by Rs 2. Current subsidy on kerosene is Rs 33.07 per litre.
Pradhan said Modi government will decide on policies keeping the interests of the country, its poor, youth and women in mind.
He, however, added that continuing subsidies does not mean the government will not pursue reforms. "Subsidies and reforms are not contradictory. They can co-exist."
The new government, he said, is focused on improving domestic oil and gas production and bring in policies that will attract investments.
A new policy paradigm that will restore investor confidence as well as protect consumer interest is what the Modi government is looking at, he said.
Endorsing the previous UPA government's monthly 40-50 paise per litre increase in diesel prices, the government will continue with the monthly revisions till the present Rs 3.40 a litre loss on the fuel is fully bridged.
After the diesel subsidy is eliminated during the course of the year, Oil Ministry may declare the fuel as decontrolled as was done in case of petrol in June 2010.
Since its decontrol, petrol rates are revised on the 1st and the 16th of every month based on average cost in the previous fortnight. Barring a few exceptions, petrol prices have moved in tandem with cost since then.