Plan panel deputy chairman Montek Singh Ahluwalia in Bangalore on Saturday. (PTI)

Bangalore, Aug. 27 (PTI): Planning Commission deputy chairman Montek Singh Ahluwalia feels domestic prices of petroleum products should align with the global rates.

“Petroleum prices should be aligned with international rates,” Ahluwalia said today.

He said till January there was a view that the hike in petrol price was an “irrational spike and that prices would come down”. “However, this perception has changed with no decline in petrol prices,” he added.

“It is a difficult decision to take,” he said, referring to the aligning of domestic petroleum prices. “But we just cannot keep subsidising petroleum products for the non-tariff group.”

The plan panel, which is working on the draft of an energy policy to be presented to the government in September, is of the view that ‘there should be some mechanical basis on which the petroleum prices are decided’.

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

He is also in favour of a higher price for petrol than diesel because the latter was a major input for industrial units. However, the Left says the burden can be lessened by lowering taxes on petroleum products in the domestic market.