Even as automobile manufacturers are considering increasing the prices of the their products, an increase in auto fuel prices is also imminent. Oil marketing companies — Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation — say prices of motor spirit or petrol may be increased in April itself. There was a strong case to increase the diesel price, too, though that would depend on a green signal from the political quarters.
Although no clear-cut measures were announced on fuel price deregulation by Finance Minister Pranab Mukherjee in the Union Budget, a statement from Prime Minister Manmohan Singh after the Budget presentation made it clear that a rise in prices of petroleum products was on the cards. OMCs are expected to take the plunge once Parliament goes for a recess at the end of March.
A senior executive from Indian Oil Corporation, the country’s largest oil marketing company, said: “We are determined to at least handle the motor spirit price increase. I hope we are able to raise the prices to a level that is desired. For instance, today we are losing Rs 7.73 a litre in Delhi. We want to recover this.”
The executive added a decision on the petrol price increase would be taken shortly after the matter was discussed with the board. “We have to discuss this with our board on which there are government officials too. We have to explain them why this fuel price rise will be important,” the executive added.
The price of petrol was deregulated in June 2010. Since then, prices of the fuel have been increased 10 times. “Price revision should happen anytime. Since last December, there has been no price revision, though both crude oil and product prices have gone up,” said a Hindustan Petroleum Corporation executive.
The OMCs are compensated for selling diesel, domestic LPG, and kerosene sold under the public distribution system at a controlled price. However, there is no compensation on petrol since its deregulation.
The HPCL official added diesel prices should also be revised, as the OMCs were losing Rs 14.73 on each litre of diesel.
A senior Bharat Petroleum Corporation executive said, considering the finance minister has pegged the fuel subsidy burden for 2012-13 at Rs 43,580 crore, compared to Rs 68,481 crore in the revised estimates for this financial year, it is anyone’s guess that a price increase in around the corner. “Its an obvious conclusion that there will be a price rise. If the government is trying to restrict the fuel subsidy at this level, they will have to increase the prices,” he said.
Prime Minister Manmohan Singh had said in his interview yesterday the government was required to put forward an effective programme to adjust the prices of petroleum products and other relevant prices. “So, we have to bite the bullet. There is no other way in which you can reduce subsidies,” he had added. Oil companies were interpreting this as an indication for the increase.
