The Hindu : Front Page : Marginal hike in petrol prices likely?

Online edition of India's National Newspaper
Tuesday, Dec 11, 2007
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Marginal hike in petrol prices likely?

Special Correspondent

NEW DELHI: The Group of Ministers headed by External Affairs Minister Pranab Mukherjee on commodity prices including that of petroleum products is likely to meet on December 14 amid reports of the Government contemplating fuel price hike after the Assembly polls in Himachal Pradesh and Gujarat.

The GoM, constituted by Prime Minister Manmohan Singh, would look into the pricing of essential commodities including the pricing of petrol, diesel, domestic LPG and kerosene distributed through the Public Distribution System (PDS). The GoM includes Defence Minister A.K. Antony, Union Finance Minister P. Chidambaram, Railway Minister Lalu Prasad, Union Road Transport, Highways and Shipping Minister T.R. Baalu and Union Consumer Affairs and Agriculture Minister Sharad Pawar.

The GoM is likely to consider a marginal hike in petrol and diesel prices and a cut in excise duty on auto fuels to cut the Rs. 7,840 crore loss public sector oil firms incur every month on selling fuel below cost. “A hike in fuel prices, duty rationalisation and raising oil quantum of oil bonds are among the options that the GoM will consider when it meets on December 14,” Petroleum Secretary M.S. Srinivasan told newsmen here on Monday. The GoM may look at fuel price hike and excise duty cut and also the possibility of cut in sales tax by States.

Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited are projected to lose Rs. 69,753 crore on sale of petrol, diesel, LPG and PDS kerosene as the Government has not allowed them to raise prices in line with the price of imported crude. At present, petrol was being sold at a loss of Rs. 8.74 a litre, diesel at Rs. 9.92 a litre, kerosene Rs. 20.53 a litre and LPG at a loss of Rs. 256.35 per cylinder.

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