Oil price hike likely by Monday

Putting at rest speculation over hike in prices of petroleum products, a senior petroleum ministry official today said the government would revise prices of petroleum products by Monday.

The revised prices are unlikely to be proportionate to the rise in crude oil prices since the last price revision.

"The decision will be a mix of price hike, revision in duties and oil bonds. The oil bonds will be around the same level as last year (last year the oil bonds were worth around Rs 11,000 crore)," he said after a meeting between officials of petroleum and finance ministries.

A new issue of oil bonds would allow oil marketing companies to moderate the price revision and partially insulate consumers from the firm trend in global crude prices.

While prices of products such as petrol and diesel are expected to be revised upwards, those of items with political ramifications such as kerosene and domestic cooking gas may remain unchanged.

Earlier in the week, Union Petroleum Minister Murli Deora had indicated to the media that sensitive items such as kerosene would not be touched in the price revision.

The forthcoming hike in prices of petroleum products would follow an upward revision in prices of petrol and diesel by private sector refiner Reliance.

Recently, the company increased the price of petrol marketed by it in the range of Rs 2.52-2.92 per litre, while hiking diesel price by Rs 2 per litre.

State-owned oil companies last increased prices of petrol and diesel in September 2005.