The Hindu Business Line : Decision likely on petro price revision next week

A decision on revision of domestic fuel prices could be expected some time next week. According to official sources, the decision on petroleum pricing would be a mix of a price increase and duty cuts on oil products.

"Hopefully by Monday there should be a decision," the official said.

The oil marketing companies (OMCs) — Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp and IBP — are losing Rs 6.51 per litre on petrol and Rs 6.66 per litre on diesel (as on May 16) for selling these products below cost.

As on May 1, the OMCs were losing Rs 16.13 per litre on kerosene and Rs 115 per cylinder on cooking gas. Collectively, the projected burden on OMCs is about Rs 73,500 crore for 2006-07.

Increase likely

The Petroleum Minister, Mr Murli Deora, has also indicated some increase in prices of petrol and diesel to cushion the impact of surging international crude prices on OMCs.

He, however, maintained that the Government was trying not to increase prices of kerosene and LPG.

The Petroleum Ministry has been in close consultation with the Finance Ministry to work out a mechanism for equitable burden sharing by all stakeholders - consumers, Government and the oil companies.

While the Customs duty on crude is 5 per cent, petrol and diesel attract a Customs duty of 10 per cent each.

The excise duty on the two oil products is at 8 per cent each. Indications are that the Government may also issue bonds to State-run oil companies to partly offset their losses.

The Petroleum Secretary, Mr M.S. Srinivasan met the Finance Secretary, Mr Adarsh Kishore, here today to discuss the issues. The Petroleum Minister along with the Finance Minister, Mr P. Chidambaram is likely to meet the Prime Minister, Dr Manmohan Singh soon to discuss the issue.