| Minister for Petroleum and Natural Gas, Mani Shankar Aiyar, who took charge of his ministry today, spent the first three hours trying to understand the situation arising from the 8 dollar per barrel hike in crude prices since January 1, when the last revision in fuel prices had taken place. |
| Sources said Aiyar was briefed about the Rs 900 crore loss the public sector unit oil firms have suffered in January-May on account of they being forced to sell the two products below the cost. |
| The officials told the minister that the only way a hike could be avoided was by cutting import duty on crude oil and excise duty on products. |
| Aiyar also has to decide on LPG and kerosene subsidy. The prices of these two have remained unchanged in the last two years and budgetary support has been reduced to one-third from April 2004. |
| The under-recoveries on account of the two products is estimated at nearly Rs 14,000 crore in 2004-05. To sustain normal margins, the price of LPG would have to be raised by Rs 42.61 per cylinder and Rs 1.49 per litre for kerosene. |
| Aiyar evaded a direct reply on the price hike issue but said: "This is a very important issue. We have to give it utmost priority and seriously consider all aspects before arriving at a decision." |
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