The Hindu : National : No fuel price hike for now, says Deora

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Wednesday, Jul 04, 2007
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No fuel price hike for now, says Deora

Sujay Mehdudia

NEW DELHI: Notwithstanding the continuing rise in international prices and the India crude basket getting dearer, Petroleum Minister Murli Deora on Tuesday ruled out a hike in petrol and diesel prices for the present.

“We stand by our commitment and UPA chairperson Sonia Gandhi’s, to protect the interests of the common man and so there will be no hike,” he said after a meeting with Finance Minister P. Chidambaram on ways to mitigate the problems arising out of the spurt in global prices.

Marketing companies have been pressuring the Petroleum Ministry to effect a minimum hike of Rs.2 in the price of petrol and Re.1 in diesel price. The public sector firms are losing around Rs.170 crore a day on sale of petrol, diesel, domestic LPG and kerosene as the Government has not allowed any revision in step with the rise in international crude prices.

The price of the Indian basket has risen more than 12 per cent since February when petrol and diesel prices were cut by Rs.2 and Re. 1 a litre. “We are closely watching the entire situation and our discussions with the Finance Minister have been very fruitful. Mr. Chidambaram’s response was very positive and we will continue to hold discussions on ways to mitigate the Rs.50,700-crore under-realisation expected on petrol, diesel, domestic LPG and kerosene during 2007-08.” Indian Oil, Bharat Petroleum and Hindustan Petroleum are losing Rs.4.97 a litre on petrol and Rs.4.45 on diesel. The loss on sale of kerosene through the public distribution system is Rs.14.63 a litre and on LPG it is Rs. 189.14 a cylinder.

Mr. Deora discussed with Mr. Chidambaram the quantum of oil bonds the Finance Ministry should issue to partly compensate the companies for the loss on fuel sales. At least one-third of the under-recovery is being sought to be met through bonds and a similar quantum would be met by discounts from upstream firms of the Oil and Natural Gas Corporation and Gas Authority of India Limited.

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