Kerosene & LPG subsidy to stay

NEW DELHI: Subsidies on kerosene and domestic LPG will continue even after March 31, 2007 deadline. ���Sonia Gandhi has given us a clear-cut order that the prices of fuels used by the poor should not be increased,��� petroleum minister Murli Deora said.

In 2002, the government had decided to phase out subsidies on LPG and kerosene over three years. In 2005, the deadline on subsidies was extended to March 31, 2007. The statement is significant in the context of forthcoming assembly elections.

Deora said that he would meet finance minister P Chidambaram soon to discuss the issue of subsidies and also put forth ministry���s view on changes in the duty structure for the sector. He was speaking on the sidelines of a function organised by Petroleum Conservation Research Association.

He also said that India may pay a higher price for extra quantities of liquefied natural gas (LNG) imported from Iran if it honours an existing contract for 5 million tonnes. In 2005, India had signed a deal with Iran to import 5 million tonnes of LNG annually over a 25-year period from 2009.

���We have been telling (Iran) they should honour the first contract and then we could talk about the price,��� he said. The deal is not yet honoured and it is awaiting Supreme Economic Council���s approval for the 5-million tonne LNG priced at $3.25 per million for British thermal units.

Deora will be meeting his Iranian counterpart Kazem Vaziri-Hamaneh later this week in the Capital. He is also likely to discuss the Iran-Pakistan-India pipeline with him. A secretary-level trilateral meeting is expected to take place in Tehran on January 20-21 to discuss the pipeline issue.