| Govt mulls fuel price hike, duty cuts |
| BS Reporter / New Delhi December 10, 2007 |
| A group of ministers (GoM) , led by External Affairs Minister Pranab Mukherjee, will consider hiking prices of petrol and diesel and cutting excise duty on the fuels when it meets for the first time on December 14. "A hike in fuel prices, duty rationalisation and raising the quantum of oil bonds are among the options that the GoM will consider on December 14," Petroleum Secretary MS Srinivasan said today. The government-owned oil marketing companies - Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) - are currently losing around Rs 300 crore per day since the government has not allowed them to raise retail prices in line with rising international crude oil prices. The retail losses of the three companies was around Rs 220 crore per day in the second fortnight of October. The three companies are projecting a loss of Rs 69,753 crore on sale of petrol, diesel, LPG and kerosene in the current financial year. Petrol is being sold at a loss of Rs 8.74 a litre, diesel at Rs 9.92 per litre, kerosene at Rs 20.53 a litre and LPG at Rs 256.35 per cylinder. An increase of Re 1 per litre in petrol would cut under-recoveries by around Rs 3 crore a day while the same for diesel would slash the loss by around Rs 12 crore a day. "The cabinet has cleared the proposal of the government bearing 42.7% of the total under-recoveries of the oil marketing companies. So, we hope that the finance ministry will now also raise the amount of bonds for the oil companies," Srinivasan said. The cabinet had cleared oil bonds worth Rs 23,400 crore when the projected under-recoveries for the year were at Rs 55,000 crore. At that time, the average price of the basket of crude oil that Indian refineries buy was around $69 per barrel. The basket |
