Facing opposition from key allies in the UPA government, Petroleum Minister Murli Deora will on Sunday meet Finance Minister Pranab Mukherjee to explore the possibility of tweaking a proposal to hike fuel prices.
The Petroleum Ministry did not take to the Union Cabinet, which met on Thursday, the proposal to free petrol prices from government control, along with a hike in diesel, cooking gas and kerosene rates, apparently because of opposition from the Trinamool Congress and the DMK to such a move.
“No, it was not discussed,” Home Minister P. Chidambaram said after a meeting of the Union Cabinet.
Sources said both Mukherjee and Deora were in favour of a hike in prices of petrol, diesel. They also favoured a rise of Rs. 25 per cylinder increase in LPG rates, but the allies did not want diesel, LPG and kerosene prices to be touched.
Without a hike in fuel prices, the state-run oil firms would incur a whopping Rs. 46,030 crore revenue loss this fiscal. Of this, only Rs. 20,000 crore is coming as subsidy support and the uncovered amount is enough to erode the net-worth of retailers.
To find a solution, Deora will meet Mukherjee on February 14, the sources said, adding that the meeting will explore if government subsidy support can be increased so as to keep the price increase to the bare minimum.
Deora, on his part, met the Prime Minister after the Cabinet meeting and submitted a memorandum asking the government to cover the unmet revenue loss on fuel sales.