While the government is yet to bite the bullet, state-owned oil marketing companies are pushing for an increase in diesel and cooking gas prices in the backdrop of firming of international crude oil prices.
“We need to arrest the situation before it is too late, as it happened in case of petrol when prices had to be revised in a go by over Rs. 7 a litre,” said a top management official from a state-owned oil company. “We need to go for small hikes than just one and a hefty one at that.”
In the backdrop of high global crude oil prices — that have moved up to an average of $103 a barrel as against $98 a barrel a fortnight ago — the losses of oil companies on diesel sales have mounted to over Rs. 1 a litre from Rs. 10 a litre a fortnight ago.
While prices of cooking gas (or LPG) in the global markets have come down, under-recoveries on the sale of every LPG cylinder still continue to be very high at around Rs. 231 a cylinder.
“Even overall under-recovery on the three products has gone above Rs. 400 crore a day from Rs. 358 crore a day just a fortnight ago on July 16,” the official said.
Kerosene losses are also ruling high at around Rs. 29 a litre as on August 1, 2012.
“The total under-recoveries on the three sensitive petroleum products — diesel, cooking gas and kerosene — stand at Rs. 47,811 crore,” said a petroleum ministry release on Wednesday.