The government is planning an across-the-board increase in the prices of auto and kitchen fuels.
A Rs. 4-5-per-litre hike in petrol prices is expected as soon as the monsoon session of Parliament ends on September 7.
A Rs. 5-per-litre hike in diesel, an increase of Rs. 75-100 per LPG cylinder and a Rs. 2-per-litre hike in kerosene prices may follow, as the finance ministry has refused to give a blanket cover for the under-recoveries being incurred by state-owned oil firms.
Under-recoveries are losses incurred by oil companies on selling fuels below cost price. The projected under-recoveries for the whole of 2012 is Rs. 1,90,000 crore, more than the country’s annual defence budget, or three times the NREGA budget.