Diesel prices will also be decontrolled: PM

On Board Air India One (IANS)- Saying that people will understand the perils of excessive populism, Prime Minister Manmohan Singh Tuesday said diesel prices will also be decontrolled on the lines of petrol last week.

"Subsidies for petroleum products have reached a level which is not connected to sound financial management of our economy," he told reporters on the way back to New Delhi after attending the G20 Summit in Toronto.

"The fact that petrol prices have been set free, the same is going to be done to the diesel prices-much needed reforms," he said, referring to the decision of an empowered group of ministers Saturday.

The ministerial panel led by Finance Minister Pranab Mukherjee had allowed state-run fuel retailers to freely fix the prices of petrol, while on diesel any hike over and above Rs.2 per litre was subjected to a nod from the oil ministry.

The prime minister said these adjustments, including those on the prices of kerosene and cooking gas, were necessary, considering the high amount of subsidy that was implicit in the pricing structure of these fuels.

"But we have taken due care to ensure the interests of the poorer sections are affected to the least possible extent. That's why the attempt to keep under regulation the prices of kerosene and LPG (liquefied petroleum gas)," he said. "I think it is manageable."

The prime minister said he had only read the views of opposition parties, but as far as he was concerned people would appreciate the compulsions the government had been subject to in order to undertake this measure.

"Our people are wise enough to understand that excessive populism should not be allowed to derail the progress our country is making, and for which it is winning kudos internationally as well," he added.