Petrol price hike of Rs 3 awaits PM nod

Petrol prices may go up by Rs 3 a litre if Prime Minister Manmohan Singh accepts the Petroleum Ministry’s proposal to free pricing of petrol.

Petrol prices may go up by Rs 3 a litre if Prime Minister Manmohan Singh accepts the Petroleum Ministry’s proposal to free pricing of petrol.

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Singh is scheduled to review the financial health of oil PSUs at a meeting on Wednesday. Diesel may either be left completely untouched or there could be a decision to gradually increase diesel prices too, sources said.

“With global crude oil prices already touching $83 (approx Rs 3,800) per barrel, the petroleum ministry will push for deregulation of petrol prices and gradual phasing out of subsidies on diesel,” said a senior petroleum ministry official.

“Both the finance and petroleum ministries are in favour of de-regulation in given the increasing burden on public sector oil marketing companies,” the official added.

The government has not allowed Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum to raise the rates of petrol, diesel, domestic LPG and kerosene despite the rise in the cost of crude oil.

The three oil firms are projected to lose Rs 44,300 crore in revenues on fuel sale this financial year.