Petrol, diesel to cost more
A formal proposal for the hike is likely to be considered next week once the state Assembly elections are through.india Updated: May 03, 2006 19:11 IST
Petrol and diesel prices are likely to be hiked by two to three rupees as oil firms were losing around Rs 10 per litre due to a global hike in prices.
Finance Minister P Chidambaram had on Tuesday indicated in Coimbatore that a fuel price hike could no longer be avoided.
"A formal proposal for an increase may be considered after elections in five states are over next week," a top official said.
The official said that 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 per litre.
Kerosene is currently being sold at Rs 16.78 per litre and LPG at Rs 220 per cylinder.
Though there was an urgent need to raise prices of all the four products, kerosene may be spared due to political compulsions.
A moderate hike of Rs 10-15 per cylinder could also be approved by the Cabinet, the official said.
State-run Indian refiners have been unable to raise government-capped retail fuel prices since September 2005, despite the surge in crude oil prices to a record 75 dollars per barrel.
The non-revision of retail prices of petroleum products by the government is expected to lead to under-recoveries of an estimated Rs 57,000 crore by oil marketing companies such as IOC, Bharat Petroleum Corp and Hindustan Petroleum Corp in 2006-07. The three together lost Rs 4,722 crore in revenues in April.
IOC, which controls roughly half of the fuel market, lost Rs 2450 crore on fuel sales in April and is projecting a loss of Rs 1560 crore in the first fortnight of May if prices remained unchanged, the official said.