Saturday, August 27 2005 15:58 Hrs (IST) - World Time -

Bangalore: Planning Commission Deputy Chairman Montek Singh Ahluwalia today (Aug 27, 2005) strongly supported the view that petroleum prices in the country should align with the global price.

"I am of the view that petroleum prices should be aligned with international prices", Ahluwalia said, delivering a lecture on 'Indian Economy-2020' organized by the Bangalore Chamber of Industry and Commerce in Bangalore.

He said till January, there was a view that the hike in petrol prices was an ' irrational spike and that prices would come down'.

"However, this perception has changed with no decline in petrol prices".

"It is a difficult decision to take", he said, relating to aligning of price.

"But we just cannot keep subsidizing petroleum products for the non-tariff group," he said.

The planning commission which was working on the draft of an Energy Policy to be presented to the Government in September, was of the view 'that there should be some mechanical basis on which the petroleum prices were decided'.

"People should be educated that if they want petroleum, we have to import it and they will have to pay for it," he said.

He said he was also in favor of a higher price for petrol than diesel because the latter was a major input for industrial units.

However, when there was an escalation in world prices then the burden could be lessened by lowering taxes.