Diesel price hike of Rs 4.50/L, LPG cylinder by Rs 100, demands Oil Ministry
The Ministry has moved a note for consideration of the Cabinet proposing options for meeting a record Rs 160,000 crore deficit arising from selling auto and cooking fuels below their cost.
Sources said that since the Finance Ministry has refused to bear additional subsidy arising from raising cap on supply of subsidised LPG, the ministry has proposed to make up for the shortfall by raising prices.
It has proposed to raise LPG rates by Rs 100 per 14.2-kg cylinder in two installments to make up for a fifth of the Rs 490.50 per bottle loss being incurred currently.
The ministry has proposed quarterly increases of Rs 50 per cylinder from April till the entire losses are wiped-off.
On diesel, it has proposed a 3-4.50 per litre hike in one go or in monthly instalments of Re 1 or Rs 1.50 per litre.
From April, it wanted Re 1 a litre increase every month till such time that the current loss of Rs 10.16 is wiped out.
Sources said the ministry has also proposed raising kerosene price by 35 paise a litre per month or Re 1 a litre per quarter till March 2015.
The ministry's proposal, however, is unlikely to come up at tomorrow's Cabinet meeting, they said.
According to ministry estimates, raising the cap to nine