With international crude prices touching the $90 a barrel- mark, state-run marketing companies are likely to increase petrol prices by Rs. 1.50-2 a litre early next week.
A call on diesel price will be taken by the political leadership, as this fuel continues to be under the administered price mechanism regime.
Big loss
Officials in the Petroleum and Natural Gas Ministry said the marketing companies came under tremendous financial stress with the crude prices going up steadily over the past few weeks.
“As petrol has been deregulated since June this year, the companies will increase the price after the conclusion of Parliament session on December 13. The companies are also pushing hard for diesel price revision by Rs. 2.”
Petroleum Minister Murli Deora said the marketing companies were incurring heavy losses.
“I cannot comment on price hike, as petrol is deregulated. As for diesel, we will have to keep in mind the interests of the common man before taking any decision.”
On Tuesday, he met Finance Minister Pranab Mukherjee to seek a meeting of the Empowered Group of Ministers next week to decide on an increase in diesel prices.
The Indian Oil Corporation, the Hindustan Petroleum Corporation Limited and the Bharat Petroleum Corporation Limited last raised petrol price on November 9, just before the winter session of Parliament began. “The increase of 32 paise was lower than the desired raise of Rs.1.10 a litre to keep domestic retail rates on a par with international prices. The three firms are currently losing Rs.2.40 a litre on petrol and Rs. 4.71 on diesel,” a senior official said.
However, officials said, freeing diesel prices from government control, as had been decided in June, was not possible at this juncture as it would mean passing on the entire Rs. 4.71-a-litre increase to consumers.
This fiscal the three retailers were projected to lose Rs. 65,839 crore in revenues on selling fuel below the imported cost.
