The Hindu Business Line : Govt to announce petro package on June 15 — To protect consumers from global price shocks

The various components of this package include a new pricing mechanism for petrol, diesel, LPG and kerosene besides lowering of duties and enhancement of subsidy allocation for LPG and kerosene.

To firm up the package, Mr Mani Shankar Aiyar, the Petroleum Minister, and Mr P. Chidambaram, Finance Minister, will meet the Prime Minister, Dr Manmohan Singh, on June 11.

Today, after a 45-minute meeting with the Finance Minister to discuss the package, Mr Aiyar told newspersons: "We hope that by June 15 we will be able to announce a full package."

However, he did not elaborate on the discussions that he had with Mr Chidambaram.

Finance and Petroleum Ministry officials are currently touching up the various aspects of the proposal under consideration.

"We (Petroleum and Finance Ministries) are in agreement on tackling this problem. Over the next 24 hours, there is going to be a detailed analysis of the figures submitted and we hope to be able to firm up a comprehensive package for discussion with the Prime Minister on June 11," Mr Aiyar said.

Once the package is ratified by the United Progressive Alliance and the Left parties, which are extending outside support, it will be announced on June 15.

"We hope to meet the Prime Minister on June 11 and come out with a comprehensive package by June 15 (the next due date for revision in petrol and diesel prices)," he said.

The Government is considering a slew of measures to mitigate the price shock for the consumer.

These include a cut in excise duty on LPG and kerosene from 16 per cent to eight per cent; introduction of fixed rates of duties on products instead of the present ad valorem rates; introduction of a product stabilisation mechanism; and increasing the Government subsidy on LPG and kerosene by stretching the phase-out period.

Fixed rates of duties will ensure that the increase in international prices does not get unduly magnified at the retail end.

A price band for product prices will give oil companies automatic leeway for price hikes within a band of global prices.

Further, a price stabilisation fund would take care of spikes in consumer prices.

The Petroleum Ministry's proposal does not, however, indicate the means to create the fund.