A hike of Rs 2 a litre each on petrol and diesel at the pumps appears imminent. Petroleum minister Murli Deora said he would be meeting Prime Minister Manmohan Singh on Friday to discuss raising retail prices, among other measures, to bail out oil marketing companies (OMCs), reeling under a severe liquidity crunch on account of the high crude oil prices.
With global crude touching $137 a barrel, the Indian oil basket has crossed the $125-a-barrel price and the government is under enormous pressure from state-owned OMCs to increase consumer prices of petrol and diesel.
Against a price hike of Rs 5 a litre each in the price of petrol and diesel proposed by the OMCs?Indian Oil, HPCL and BPCL?to tide over the current crisis following the unprecedented increase in the price of global crude, sources said the government may accede only to a hike of Rs 2-3 a litre.
The three OMCs currently lose Rs 450 crore in revenue on fuel sales every day. Under-recoveries total Rs 16.34 a litre on petrol, Rs 23.49 a litre on diesel, Rs 305.90 a cylinder of LPG and Rs 28.72 a litre of kerosene.
Simultaneously, Deora said he has also convened a meeting of OMC heads to discuss the price hike before he calls on the PM. Sources said clear instructions would also be issued to them that there should be no shortage of fuels and petroleum products in the market.