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The Prime Minister's top economic advisor, Dr C. Rangarajan, today said increasing prices of petroleum products is “necessary” to restrict the fiscal deficit to 4.6 per cent in the current fiscal.
“Review of administered prices, particularly with respect to petroleum products, has become necessary. It is required primarily from the point of view of maintaining the fiscal deficit,” the Prime Minister's Economic Advisory Council (PMEAC) Chairman, Dr C. Rangarajan, told reporters here.
Outlining the need for bringing domestic prices of petroleum products on par with the prevailing international market rates, Dr Rangarajan said it is necessary “because we (India) import nearly 80 per cent of our requirement with respect to crude oil”.
International crude oil prices have been soaring due to unrest in Middle East and North Africa (MENA) region.
State-owned oil companies recently increased petrol price by about Rs 5 per litre to reduce their losses.
Despite the hike, they may again raise petrol price by about Rs 0.50 per litre from June 16 as last month's steep increase in rates is not enough to cover the cost of raw material (crude oil).
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