Govt may not take up fuel price cut tomorrow | business | Hindustan Times
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Govt may not take up fuel price cut tomorrow

The government is unlikely to take up the issue of reducing petrol, diesel and domestic LPG prices on Thursday as consultations on Petroleum Ministry's simultaneous proposal for freeing auto fuel pricing were not complete.

business Updated: Jan 14, 2009 19:45 IST

The government is unlikely to take up the issue of reducing petrol, diesel and domestic LPG prices on Thursday as consultations on Petroleum Ministry's simultaneous proposal for freeing auto fuel pricing were not complete.

"I don't think the Cabinet will take up the issue tomorrow," a senior Cabinet minister, who wished not to be identified, said.

The Petroleum Ministry is pushing for a Rs 5 per litre reduction in petrol prices, Rs 2 a litre on diesel and Rs 25 per domestic LPG cylinder.

Alongside, retail pricing of petrol and diesel is also proposed to be freed from government control, which would effectively mean a revision in price every fortnight in step with changes in the international market.

"While it is easy to free pricing today when international crude oil prices are below USD 40 a barrel but there is no consensus yet on if the companies should be allowed to raise prices when oil moves up," he said.

An alternate proposal of giving oil companies limited freedom of adjusting prices within a specified band may also be put up before the Cabinet "in next few days", he said.

State-run oil companies are currently making Rs 9.70 a litre profit on sale of petrol, Rs 3.70 a litre on diesel, but are loosing Rs 31.70 per LPG cylinder and Rs 11.69 on every litre of kerosene.