State-owned oil firms, who have been holding back a price increase in petrol due to the assembly elections in five states, are expected to get the go-ahead to raise the prices of petrol by about Rs 3 a litre soon.
“The increase in petrol prices may be announced shortly,” confirmed a senior petroleum ministry official, adding that the revision could come “as early as Thursday-Friday night.”
Petrol price was last revised in January for the eighth time after the government had freed it from its control last June. However, due to state assembly elections, state oil firms were informally advised by the government not to increase prices.
However, a decision to increase the diesel and cooking gas (LPG) prices may take some more time. The meeting of the empowered group of ministers (EGoM) under finance minister Pranab Mukherjee on Wednesday to consider raising the diesel price by R3-4 a litre and domestic LPG rates by Rs 20-25 per cylinder stands deferred, the official disclosed without assigning any reason.
“No new date has been intimated to us so far,” he said.Even as the oil firms are losing about Rs 8.50 on every litre of petrol sold, the entire burden will not be passed on to consumers in one go. "Oil companies will be asked to stagger the hike over a couple of months," the official said.
In addition, oil companies —Indian Oil, Bharat Petroleum and Hindustan Petroleum — are losing Rs 18.19 a litre on diesel, Rs 29.69 on kerosene and Rs 329.73 per 14.2-kg LPG cylinder.
On the EGoM’s agenda was suggesting options to mitigate the over Rs 1,80,000 crore revenue loss state-owned oil firms have projected in 2011-12 on selling diesel, domestic LPG and kerosene at current rates.
The revenue loss, termed as under-recovery by oil firms, will be the highest ever, even more than what they lost in 2008-09, when crude oil prices touched a record high of $147 a barrel.
“Losses on petrol are not included in the under-recovery figures as it is a decontrolled commodity,” the official said.