Fuel pricing: Deora, Chidambarm meet on Mon

In a bid to work out a package on pricing of petrol and diesel and subsidies on kerosene and LPG before the month-end, petroleum minister Murli Deora will meet finance minister P Chidambaram on Monday.

"We are in discussions with the finance ministry, and hope that something will come out of it by the end of this month," Deora said.

"We are trying to see that consumers, especially small consumers, are not burdened by the rise in fuel prices," he added.

The petroleum ministry is in talks with the finance ministry based on the recommendations of the C Rangarajan Committee, Deora said, adding the panel's suggestions could not be incorporated in the budget as it had submitted its report just a few days before the presentation of the budget.

The oil sector was expecting rationalisation of duties in the budget, as had been suggested by the Rangarajan committee, to help retailing firms that posted a net loss of Rs 2,898 crore in the first nine months of fiscal 2005-06.

The budget neither hiked subsidies nor rationalised duties although it did lower the central sales tax on LPG.

The Rangarajan panel had suggested a steep Rs 75 per cylinder raise in LPG price, and a Rs 1.21 per litre increase in petrol and Rs 1.96 per litre hike in diesel prices.

On taxation, it had recommended a revenue neutral rationalisation wherein customs duty on petrol and diesel was to be cut to 7.5% from the current level of 10%.

It had also suggested changing excise duties on petrol and diesel (currently at 8% plus Rs 13 a litre and 8% plus Rs 3.25 per litre, respectively) to Rs 5 per litre on diesel and Rs 14.75 a litre on petrol.