Early polls may lead to oil price hike being put off

The possibility of general elections being held in April-May this year has led the government to sound off public sector oil marketing companies about raising the prices of diesel and petrol till after the polls.

This despite the fact that in the past one week, petrol prices have jumped a staggering 17.6 per cent over the previous month's average price and diesel prices have gone up 11.5 per cent.

The international price of petrol, which averaged $38.43 a barrel last month, has touched $45.20 a barrel.

Similarly, diesel, which averaged $35.10 a barrel in December, is now ruling at $39.15 a barrel.

Under normal circumstances, public sector oil marketing companies will have hiked the prices of petrol and diesel by at least Rs 1.50 a litre at the time of next revision on January 15-16.

But now, they might have to absorb the rise in international prices, industry sources said.

The political leadership of the country is learnt to have taken a serious view of the two successive increases in the prices of petrol and diesel in the past month.

The petroleum ministry may ask the upstream oil companies "" Oil and Natural Gas Corporation (ONGC) and Gail India Limited ""to also share the marketing companies' burdens on account of the underrecovery from the sale of the two automobile fuels.

ONGC and Gail are already sharing the burden of these companies on account of underrecoveries from the sale of subsidised domestic liquid petroleum gas and kerosene.