India to mull ending fuel subsidies, approval likely

NEW DELHI, May 29 (Reuters) – India’s government said it may eliminate diesel and gasoline subsidies as soon as July, quicker than expected, ending a policy that had crushed state refiners’ profits, strained government finances and inflated oil demand.

Emboldened by an unexpectedly strong election victory this month, the Congress-led cabinet will consider a proposal to free state controls on transport fuel prices in July, Oil Minister Murli Deora told reporters, news that sent shares of oil companies surging as investors bet on more stable earnings.

“It will go to the cabinet. It will be discussed soon, within six weeks,” said Deora, who on Thursday was reconfirmed in the role he has held since early 2006, when world crude oil prices CLc1 were first pushing beyond $70 a barrel.

Reuters