Diesel price to rise 50p/month; LPG cylinder cap set at 9/year
The government’s continued influence on pricing petrol led to a situation where the companies could not always raise prices in line with global oil prices till lately, while losses from the lag has not been compensated. “We have not received any communication from the ministry yet. We will go by the ministry’s directions,” said RK Singh, chairman, BPCL.
Unhappy with the lack of real freedom to hike petrol prices, Indian Oil Corporation chairman RS Butola had told FE in an interview in December that considering the difficulties in increasing petrol price and lack of compensation, the company would rather accept a rollback of the deregulation.
Under-recoveries in the current fiscal are estimated to be Rs 1.67 lakh crore. For domestic LPG and kerosene, under-recoveries stand at Rs 490.50/cylinder and Rs 30.64/litre respectively. OMCs are currently incurring daily under-recoveries of about Rs 384 crore on the sale of diesel, kerosene and domestic LPG. Cutting these subsidies (compensation for these losses) is crucial for the Centre’s fiscal consolidation road map and avoiding a downgrade of India’s sovereign credit rating to junk status.
The CCPA raised the annual ceiling on subsidised LPG cylinders to 9 (from previous 6) effective next fiscal and raised the entitlement for this year to 8. Subsidised LPG costs Rs 410.50 per 14.2-kg cylinder and any household requirement beyond the new limit of 9