Petroleum Ministry will next week begin consultations on a possible hike in petrol and diesel prices to offset the Rs 75,000 crore revenue losses projected for oil companies in the wake of soaring international prices.
Petroleum Secretary MS Srinivasan will meet his counterpart in the Finance Ministry on May 8 to seek cut in import and excise duties and raising of subsidies on cooking fuel as measures to help oil firms, official sources said.
On cards is a Rs 2-3 per litre hike in petrol and diesel prices and Rs 15-20 increase per LPG cylinder, but a decision would be taken only after consultations with allies including the Left.
Meanwhile, the ministry in a press release said: "no decision (on raising prices) has yet been taken."
"The process of consultation is yet to begin and it will take some time for this process to be completed and hence any reports of price hike in the meantime are pure speculative in nature and are baseless," it said.
State-owned oil retailing firms were losing Rs 9.34 per litre on selling petrol below the imported cost while the loss on diesel was Rs 10.43 a litre.
{{/usCountry}}State-owned oil retailing firms were losing Rs 9.34 per litre on selling petrol below the imported cost while the loss on diesel was Rs 10.43 a litre.
{{/usCountry}}Kerosene was being sold at a loss of Rs 16.78 per litre and LPG at Rs 220 per cylinder loss, according to officials.
State-run Indian refiners have been unable to raise government-capped retail fuel prices since September last year, despite the surge in crude oil prices to record 75 dollars a barrel.
The non-revision of retail prices of petroleum products by the government is expected to lead to under-recoveries of an estimated Rs 75,000 crore by oil marketing companies in 2006-07.