Advocating the need for doing away with subsidies on petroleum products, a top government official on Saturday said the oil companies have been making huge losses and there is no point in continuing with subsidies on petroleum products.
Besides, a rise in petroleum products is unlikely to lead to a sharp rise in inflation, he observed.
“Considering the losses suffered by petroleum companies due to subsidies, there is no case for subsiding petroleum products,” S. Sundareshan, Secretary, Union Ministry of Petroleum and Natural Gas, told reporters here. He said the oil companies suffered losses of over Rs 1 lakh crore during 2008-09.
Mr. Sundareshan argued that if petroleum prices were increased, it would not add much to the inflation. “It will not be correct to say that the hike will add to the inflation. It may make only a marginal impact on inflation,” he said.
He, however, refused to say whether petroleum prices would be raised or not. “It will be decided by the Empowered Group of Ministers next week,” he said.
The secretary said that presently oil companies make a loss of Rs 3.50 per litre on petrol, Rs 3.40 on diesel, Rs 18 on Kerosene and Rs 280 on LPG cylinder.
Keywords: petrol prices, price hike, fuel prices, Indian economy, inflation
