The Hindu : National : Government denies report on fuel price hike

Online edition of India's National Newspaper
Friday, May 05, 2006

National

National

Government denies report on fuel price hike

New Delhi: The Ministry of Petroleum and Natural Gas has clarified in response to some speculative reports that prices of petroleum products in the country have been hiked on Thursday, that no decision in this regard has yet been taken.

The process of consultation is yet to begin and it will take some time for this process to be completed and hence any reports of price hike in the meantime are pure speculation and are baseless, an official statement here said.

The Government is planning for a Rs. 2-3 per litre hike in the price of petrol and diesel in the wake of oil firms losing almost Rs. 10 a litre due to steadily increasing global crude oil prices. The Petroleum ministry is likely to meet the Finance ministry and PMO shortly.

State-owned oil retailing firms are losing Rs. 9.3 a litre due to the sale of petrol below the imported cost and a loss of Rs. 10.4 a litre on the sale of diesel. Kerosene is being sold at a loss of Rs. 16.8 per litre and LPG at a loss of Rs. 125 a cylinder.

Indian refiners were unable to raise government-capped retail fuel prices since September last yeardespite the surge in crude oil prices to a record $ 75 per barrel.

As retail prices of petroleum products have not been revised by the Government, it has led to under-recoveries amounting to Rs. 75,000 crore by oil marketing companies, IOC, BPCL and HPCL in 2006-07.

The three companies have together lost Rs. 4,722 crore in revenues in April.

The gross under-recoveries for last amounted to Rs. 39,600 crore for the oil marketing companies.

If prices remain unchanged, the IOC, which controls half of the fuel market, is projecting a loss of Rs. 1,560 crore in the first fifteen days of May, if prices remained unchanged.

It had lost Rs. 2,450 crore on fuel sales in April.

UNI

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