A meeting of the ministerial panel led by finance minister Pranab Mukherjee expected this month-end to consider increasing the prices of diesel and LPG has been deferred. Official sources said that no timeframe has been decided for the meeting.
It was originally scheduled to meet on December 15 but was deferred to December-end due to non availability of certain ministers.
Oil ministry officials are of the view that diesel and LPG prices need to be raised in view of the high crude oil price, which has crossed $91 a barrel. It was expected that the EGoM may consider a Rs 2 a litre hike in diesel prices to help fuel retailers IOC, HPCL and BPCL to reduce their losses from selling diesel, kerosene and LPG at government fixed prices.
?The under-recovery (or the revenue oil companies lose) on diesel stands at around Rs 6.08 per litre,? a source said. Besides diesel, the oil firms lose as much as Rs 17.72 per litre on PDS kerosene sales and nearly Rs 272.19 per 14.2-kg LPG cylinder.
In the meantime, Planning Commission deputy chairman Montek Singh Ahluwalia said in Chandigarh that diesel price ought to be aligned with the global price in view of mounting losses of state-owned oil firms. ?I think diesel prices need to be aligned with global prices as soon as possible,? he said.
Ahluwalia said that delay by a week or by two weeks is not a solution. Ahluwalia said further said that subsidising oil prices would result in high fiscal deficit.