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Petrol could get dearer by almost Rs 8 a litre in the next couple of days, if public sector oil retailers have their way.
The retail sale price (RSP) of petrol in Delhi has been Rs 65.64 since December 1, last year . The under recovery on petrol is Rs 7.17 a litre. Sources said the industry view was that the rates should be increased so that it will serve to offset the losses incurred over the previous months.
The political implications of any such move had stopped oil marketers from taking a decision for over four months. But, with the Finance Bill expected to get the Rajya Sabha's nod in a couple of days and the Parliament session slated to get over by May 22, the companies are hoping to raise prices.
An industry observer said varied views were emerging on the timing of the hike. The options being considered are, whether to raise prices once the Finance Bill is passed in the Rajya Sabha or wait for this Session to get over.
There are stronger chances of this happening in a day or so, as there is no threat of the Government being toppled now.
Though petrol is a deregulated product, there is an artificial Government control over its pricing.
The Minister of State for Petroleum and Natural Gas, Mr R.P.N. Singh, had recently informed the Rajya Sabha that the public sector oil marketing companies – Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation – have not revised petrol price since December 1 despite a sharp increase in international prices of petroleum products.
In fact, to mitigate losses on petrol sale, the oil retailers have suggested to the Government that it either declare petrol as a ‘regulated' product temporarily and provide 100 per cent cash compensation or reduce the excise duty from Rs 14.78 a litre by an amount equivalent to the under-recovery on the product.
The Petroleum Ministry has taken up the matter with the Finance Ministry.
On other regulated petroleum products, the companies continue to incur losses. The under-recoveries on diesel is about Rs 14 a litre, kerosene Rs 31.49 a litre and domestic LPG, close to Rs 500 a cylinder. The Petroleum Ministry has also been requesting the State Governments to reduce local taxes and levies on petroleum products — auto and cooking fuels, which would result in lower retail price.
During 2010-11, the contribution of the petroleum sector to the Central exchequer through taxes/duties on crude oil and petroleum products, dividend to the Government and income tax etc, was Rs 1,36,497 crore. It is Rs 84,404 (provisional) crore in the April–December period of 2011-12 fiscal.
The contribution to the State exchequer through value added tax, royalty, octroi, entry tax, and dividend income etc was Rs 88,997 crore in 2010-11 and Rs 78,427 (provisional) crore in the 2011-12 (April–December) fiscal, respectively.
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