Industry & Economy
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Petroleum
Oil firms seek hike in petro prices; Cabinet to decide
Our Bureau
New Delhi
,
April 6
WITH the unprecedented surge in international crude prices, domestic oil companies have stepped up efforts to seek an upward revision in the prices of petrol and diesel.
The issue is likely to be taken up by the Union Cabinet, most probably on Friday. The Petroleum Ministry has already submitted a Cabinet note on the issue.
Petrol and diesel prices in the country have not been changed since November 2004, except in Delhi, where some restructuring had taken place because of local taxes. According to the oil companies, this has lead to huge revenue loss as they are forced to sell at lower prices. Under-recoveries on this account by all oil companies were estimated at Rs 20,000 crore in the last fiscal (2004-05).
The Indian basket of crude oil has seen an all-time high of $53 a barrel. The prices of petrol and diesel in the country are fixed on the principal of import parity. The Ministry has been maintaining that the pricing mechanism for petrol, diesel, PDS kerosene and domestic LPG during 2004-05 has attempted to balance the interests of various stakeholders: consumers, the government and oil companies.
Sources in Indian Oil Corporation Ltd (IOC) said the company has sought a hike of Rs 5.18 a litre in diesel and Rs 4.70 for petrol. Mr S. Behuria, Chairman of IOC, said, this surge in crude oil prices has necessitated an increase of Rs 4 per litre in diesel and Rs 2 in petrol. But along with the increase in international prices, the increase in excise duty on these two products call for a Rs 1.06-per-litre rise in diesel and Rs 2.20-per-litre in petrol prices, he added.
With the latest spurt in international prices, the company is expected to lose Rs 300 crore on petrol and diesel sales in the first fortnight of April alone.
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