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Deora to meet FM on fuel pricing issue

The Petroleum Minister will discuss a package with FM to ward off the losses being suffered by oil firms on fuel sales.

india Updated: Mar 06, 2006 16:54 IST
Press Trust of India
Press Trust of India

Petroleum Minister Murli Deorais likely to meet Finance Minister P Chidambaram in a day or two for working out a package to ward off the losses being suffered by oil companies on fuel sales and resolve the issue of subsidy in cooking gas and kerosene

"I spoke to Finance Minister on Saturday and have sought time for this evening. I may meet him today or tomorrow," Deora told reporters here.

The Petroleum Ministry is in talks with Finance Ministry based on the recommendations of C Rangarajan committee, since its suggestions could not be incorporated in the budget.

The oil sector was expecting rationalisation of duties in the budget, as had been suggested by Rangarajan Committee, to help retailing firms which posted a net loss of Rs 2,898 crore in first nine months of 2005-06 fiscal.

The budget neither hiked subsidies nor rationalised duties, although it did lower the central sales tax on LPG.

The Rangarajan panel had suggested a steep Rs 75 per cylinder raise in LPG price and a Rs 1.21 per litre increase in petrol and Rs 1.96 per litre hike in diesel prices.

On taxation, it had recommended a revenue neutral rationalisation wherein customs duty on petrol and diesel was to be cut to 7.5 per cent from current 10 per cent.

It had also suggested changing excise duties on petrol and diesel (currently at 8 per cent plus Rs 13 a litre and 8 per cent plus Rs 3.25 per litre respectively) to Rs 5 per litre on diesel and Rs 14.75 a litre on diesel.

First Published: Mar 06, 2006 16:54 IST