Petroleum prices should be linked to world prices: Montek

In the face of rising global crude oil prices, the Planning Commission has said that domestic prices of petrol, diesel and cooking gas should be linked to oil prices in the international market. "They (prices of petroleum products) should be linked to world prices," Planning Commission Deputy Chairman Montek Singh Ahluwalia said when asked about the global crude prices now surging to about 70 dollars a barrel. On whether he agreed with Petroleum Minister Murli Deora, who favoured deregulating domestic prices of petroleum products, he said, "The Planning Commission's view, which is reflected in the integrated energy policy, is that domestic petroleum prices should reflect world prices." Noting that the country imports 70 per cent of its crude oil requirement, Ahluwalia said, "I don't think it is sustainable to delink domestic prices from import costs. "The idea of subsidising imported products (crude oil), which are mainly consumed by the well-off, doesn't make sense," he said. As regards subsidy for the poor, Ahluwalia said, "There is a need for a targeted subsidy for the vulnerable population to assure access to essential items like kerosene for the poor, but that can be handled."