The Hindu : Front Page : No decision on oil price hike

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Thursday, May 29, 2008
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No decision on oil price hike

Sujay Mehdudia

NEW DELHI: The Empowered Group of Ministers (EGoM) headed by Pranab Mukherjee, which met here on Wednesday to take up the Petroleum Ministry’s proposal to effect a “sharp hike” in petrol and diesel prices, could not take a decision owing to “sharp differences” between the Petroleum and Finance Ministries.

Meanwhile, the Indian Oil Corporation said it would only distribute whatever was possible in its domestic capacity and would not resort to imports, indicating curtailment in supplies to retailers.

“Serious differences”

Highly placed sources said “serious differences” over a cut in import duties on crude and a downward revision of excise duties on petrol and diesel dominated the proceedings at the EGoM meeting, which lasted for almost an hour. While Finance Minister P. Chidambaram made it clear that he was not for any revenue loss, thus ruling out any duty or excise cut, Petroleum Minister Murli Deora painted a “grim scenario,” pleading that it was high time this matter was decided one way or the other as the present “mess” would leave oil marketing companies (OMCs) without cash to import crude.

The Finance Ministry is refusing to share the burden of the OMCs by making adjustments in duty structure, a demand made by the Left parties as well as the BJP.

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