The government seems to be prolonging the decision on the much-hyped issue of hiking petrol and diesel prices. Even though the marginal hike proposed by petroleum minister Murli Deora?Rs 2 a litre on petrol and Re 1 on diesel – was approved by Prime Minister Manmohan Singh at a meeting on Tuesday, the issue is yet to be formally put up for approval before the Cabinet.
Official sources said the delay was because UPA chairperson Sonia Gandhi was yet to give her consent to the proposed price hike. Moreover, Ram Vilas Paswan and Lalu Yadav are also understood to have conveyed their dissent to Sonia Gandhi over fuel price hike. On heir part, the Left parties are pressing for a cut in duties on petroleum products.
?It?s no longer about a one or two rupee hike in fuel prices. The issue has taken a political turn and is far from any economic consideration,? said a senior petroleum ministry official.
The proposal for increasing petrol price by Rs 2 a litre and diesel by Re 1 was expected to be approved by the Cabinet on Thursday but was eventually not taken up for discussion.
Finance minister P Chidambaram and petroleum minister Murli Deora had met the PM on Tuesday morning, where the marginal fuel price hike was approved by the PM. A consensus also emerged over no reduction in the excise duty on petrol and diesel. Instead, it was proposed to further increase the quantum of oil bonds being issued to the state-owned oil marketing companies?Indian Oil, Bharat Petroleum and Hindustan Petroleum, currently reeling under losses on sale of auto fuels, cooking gas (LPG for domestic use) and Kerosene for PDS.
Currently, petrol is being sold at Rs 43.52 per litre (in Delhi), while diesel at Rs 30.48. Following the price revision, the new price of petrol will be Rs 45.52 (in Delhi) while that of diesel will be Rs 31.48. Even as the oil companies are losing nearly Rs 331 per LPG cylinder, sources said there would be no increase in the prices of cooking gas.
OMCs are losing Rs 10.57 on every litre of petrol, Rs 11.56 a litre on diesel, Rs 19.89 on kerosene and Rs 331 on each LPG cylinder.
Petrol and diesel prices were last raised in June 2006 when crude oil was at $67 a barrel. It is at $92 a barrel this year. LPG prices were last raised by Rs 20 per cylinder in November 2004 when crude was at $34 a barrel.
