FM nod on oil pricing awaited

Petroleum Minister Mani Shankar Aiyar said he was awaiting a response from the finance ministry to his ministry's proposal on the new pricing mechanism for petrol, diesel and cooking gas, but indicated that the new pricing policy would be in place by June 15.

"The finance ministry is still working on the figures that we submitted to them. It is only after it has had a look at the fiscal component that we will be able to go to the Prime Minister," Aiyar told reporters.

The minister's comments came hours after Finance Minister P Chidambaram met Prime Minister Manmohan Singh. Petroleum Secretary BK Chaturvedi, who was appointed cabinet secretary, was also present at the meeting.

The petroleum minister had earlier announced he, along with Chidambaram, would meet the Prime Minister on the pricing mechanism. "To the best of my knowledge, the meeting has not been scheduled yet," Aiyar said.

Asked if the new pricing mechanism would be announced by June 15 as announced earlier, he said, "We are working towards that deadline."

The minister said he stood "vindicated" as he had chosen to wait for the June 3 meeting of the Organisation of Petroleum Exporting Countries (Opec) before taking a decision on a price hike.

Since then oil prices have come down by nearly $4 a barrel. The new government is under pressure to check oil companies from bleeding in the wake of a $ 7 per barrel increase in crude oil prices.

Oil companies have not been permitted to increase prices for petrol and diesel since last December and cooking gas and kerosene prices since April 2002.