The Hindu Business Line : Petro price hike likely by third week

Mounting losses
OMCs losing Rs 9.80/litre on petrol, Rs 10.20/litre on diesel, Rs 16.60/litre on kerosene and Rs 125/cylinder on cooking gas.
Decision on the recommendations of the Dr C. Rangarajan Committee is also expected.

New Delhi , May 3

The expected increase in petrol, diesel and cooking gas (liquefied petroleum gas) prices may take place by the third week of this month. The Secretary in the Ministry of Petroleum and Natural Gas, Mr M.S. Srinivasan, told select media persons here on Wednesday that a final decision on price revision would be taken after consultations between the Petroleum and Finance Ministries.

The state-owned oil marketing companies (OMCs) are estimated to suffer under recoveries in the range of Rs 72,000-Rs 75,000 crore in the full year at currently prevailing international crude prices unless the domestic petroleum product prices are reviewed, Mr Srinivasan said.

As on date the OMCs are losing Rs 9.80 per litre on petrol, Rs 10.20 per litre on diesel, Rs 16.60 per litre on kerosene and Rs 125 per cylinder on cooking gas. The Petroleum Secretary, however, said no decision had been taken yet on the quantum of increase on these products.

Official sources said that a meeting between the Petroleum and the Finance Secretaries is likely in the next few days to prepare a basic paper on the issue for the consideration of the Petroleum Minister, Mr Murli Deora, and the Finance Minister, Mr P. Chidambaram, who are slated to meet sometime next week. A formal proposal is then likely to be taken to the Prime Minister, Dr Manmohan Singh. A decision on the recommendations of the Dr C. Rangarajan Committee on petroleum pricing is also expected by then.

Revision likely

Sources also indicated that a revision in the prices of LPG and SKO (kerosene) may also be required under the current circumstances. Though there has been a pressing need to raise prices of all the four products, the Government has not allowed any increase in fuel costs since September last year. The price freeze led to losses by Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation in the quarter ended December 31.

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