Thursday, May 4 2006 17:16 Hrs (IST) - World Time -

Hyderabad: The Planning Commission today (May 4, 2006) said the surge in global oil prices should be passed on to customers, but favoured having some provisions to safeguardthe interests of vulnerable sections of the society.

"Planning Commission believes that it is logical to pass on (increase in oil prices to customers) and make specialprovisions where they are needed," its Deputy Chairman Montek Singh Ahluwalia told reporters on the sidelines of an ADB seminar here.

Increased global oil prices are anyway being paid by the country, he said to buttress his argument.

He said duties should be reduced to compensate for increase in international prices only if there is general surcharge on duties so that revenue is not lost and there is no adverse impact on fiscal deficit.

Yesterday, Finance Minister P Chidambaram had said any decision on raising petro prices could be taken only after consulting UPA allies.

"It is no longer an economic issue but a political one when oil prices cross 50-60 dollars a barrel," Chidambaram had said.

He said the Government has to consult its allies before taking any such decision.

"It is for the petroleum minister to meet them. So far it has not been done," he added.

RBI Governor Y V Reddy had also said yesterday the Government has to take some decision on oil prices pass- through, which is not dependent on the daily movement of oil prices.

International oil prices are ruling at over 70 dollars a barrel, but India, which imports 70 per cent of its crude oil, has not raised petroleum prices in 2006.