The Hindu Business Line : Review of petrol, diesel prices after monsoon session

The Indian basket of crude oil has risen substantially since February, when petrol and diesel prices were cut by Rs 2 and Re 1 per litre respectively.

Our Bureau

New Delhi, Aug. 10

If the surge in global prices continues, the Government may review petrol and diesel prices after the monsoon session of Parliament ends (mid-September). “Don’t expect any decision before September 14,” a senior official told presspersons.

No suggestions

The Petroleum Ministry, which is constantly monitoring the situation, has not suggested any numbers for increase in fuel prices.

It has, however, presented the basic facts including the under realisation suffered by the State-owned oil marketing companies due to selling petroleum products below the cost price.

The Indian basket of crude oil has risen substantially since February, when petrol and diesel prices were cut by Rs 2 and Re 1 per litre respectively.

The Indian crude basket for August (till date) averaged at $70.99 per barrel and the July average was $72.69 a barrel. For the period April till date the basket averaged at $68.34 a barrel. On August 8 the basket stood at $68.75 a barrel.

The Petroleum Ministry has sought from the Finance Ministry oil bonds worth Rs 19,000 crore to partly meet the under-realisation on fuel sale. According to reports, the decision to keep the price hike on hold was taken at a meeting between the Prime Minister, Dr Manmohan Singh; and the Petroleum Minister, Mr Murli Deora, early this week.

Roll back

Indications are that after the monsoon session the Government could consider raising petrol price by Rs 4 per litre and diesel by Rs 2 a litre. Due to the increase in global crude prices, the oil marketing companies were losing Rs 190 crore per day on sale of petrol, diesel, cooking gas and kerosene.

The total under realisation on fuel sale to be suffered by the marketing companies for the current fiscal was estimated to be Rs 52,162 crore. The oil marketing companies were losing Rs 5.88 per litre on petrol, Rs 4.80 a litre on diesel, Rs 189.14 per LPG cylinder and Rs 14.63 on sale of every litre of kerosene.

In June 2006, the Government had raised the prices of petrol and diesel by Rs 4 a litre and Rs 2 a litre respectively but rolled back in two instalments in November last year and February this year.