Petroleum minister S Jaipal Reddy has sought an immediate rise in the prices of diesel, kerosene and domestic liquefied petroleum gas (LPG). The empowered group of ministers on fuel pricing was likely to meet soon, he said today.
The finance minister Pranab Mukherjee-headed group was first supposed to meet on May 11, immediately after the end of West Bengal Assembly elections. However, it got deferred. The group was then said to meet on June 9, but no such meeting happened.
“I have been pressing for it...They have to take a call soon,” Reddy said, adding the oil marketing companies (OMCs) had already lost Rs 45,000 crore this quarter.
Shares of the OMCs rose on the news. On the Bombay Stock Exchange, shares of Indian Oil Corporation rose 2.71 per cent to close at Rs 322.55. Hindustan Petroleum and Bharat Petroleum gained 1.52 and 1.65 per cent, respectively, to close at Rs 371.50 and Rs 614.90.
The OMCs buy crude oil at market rates, but are required to sell diesel, kerosene and LPG at government-subsidised prices, resulting in losses.
These companies lose Rs 12.64 on every litre of diesel, Rs 26.16 on every litre of kerosene and Rs 381 per LPG cylinder. Diesel price has not been raised since June 26 last year. At these rates, the OMCs could end up this financial year with an all-time-high loss of Rs 165,000 crore.
These companies are apprehensive that prices won’t be increased, once the monsoon session of Parliament begins in mid July.
The last increase in prices of these three products was taken in June last year, when crude was ruling around $72 per barrel. Crude oil has averaged $110 barrel this month. In June 2010, diesel price was raised by Rs 2 per litre, kerosene by Rs 3 per litre and LPG by Rs 35.
