Freeing fuel price will tame inflation: Montek

Posted By: Staff
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New Delhi, Feb 5: The Planning Commission on Friday, Feb 5, said that freeing fuel prices will help in taming inflation.

Planning Commission Deputy Chairman Montek Singh Ahluwalia said here, "It (decontrolling fuel price) will not flare up the inflation. I just think that it is not sustainable to have prices those are not line with the world prices."

"By keeping the price of petroleum down you are actually bearing a subsidy that causes a generalised rise in price ... if you get rid of the subsidy there will be rise in petroleum prices but it will soften the generalised rise in prices," Ahluwalia said.

"It (freeing fuel price) is there in the integrated energy policy, we had said that any policy that does not link petroleum and diesel price to evolving trend in world price is absolutely unsustainable," he said.

"I agree with the recommendation of the (Kirit Parikh )committee," he said.

On Wednesday, Feb 3, an expert group, headed by former Planning Commission member Kirit Parikh, suggested freeing of fuel prices.

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