With the Empowered Group of Ministers (EGoM) being not in place due to the departure of Pranab Mukherjee from the government, the Petroleum Ministry is contemplating sending a proposal of hiking the prices of diesel, LPG and kerosene to the Cabinet Committee on Economic Affairs (CCEA) and leaving the decision to the Prime Minister.
The EGoM, which is authorised to decide on diesel, LPG and kerosene pricing, has not met since June 25, 2011. “We can send a proposal for raising the prices to the Cabinet Secretariat for listing before the CCEA, and it would be up to them to decide when it should be taken up,” a top official of the Petroleum and Natural Gas Ministry said.
The subsidy burden was going out of control and there was immediate need to revisit the prices of diesel, LPG and kerosene. This “unpopular move” had found consensus among all but little support due to the number game in Parliament.
With the Vice-President election scheduled for August 7, the brass of the government was reportedly of the feeling that the prices could not be increased before that.
The Prices have not been raised since June 25 last year, though the cost of crude had spiralled and the rupee has depreciated against the dollar, making imports very costly. The State-owned oil firms now sold fuel at a loss of Rs. 11.26 a litre while they lost Rs. 319 on sale of every 14.2-kg LPG cylinder for domestic consumption. Besides, they were losing Rs. 28.56 a litre on kerosene sale. “In case there is no price hike, the phenomenal losses of these three fuels to the tune of Rs. 1,60,000 crore would have to be met by the government.”
Keywords: Petroleum Ministry, petrol price hike, diesel price hike, EGoM, Cabinet Committee on Economic Affairs
Subsidaries is the main reason for the fiscal deficit in india, govt haven't taken any major steps for increasing the bio-diesel production in the country for reducing the import costs on the petroleum products.
Everything was perfect when the govt. was controlling the fuel price. When the govt. started to favoring the oil companies, things started to change. This govt. is torturing the people. petrol can sell 40/liter. Congress is going to suffer in the next election. Surely the petrol and diesel price will be reduced at the time of elections. Just for vote. I will never do vote in my life. There is no meaning in it. this country is becoming a hell and what is the meaning to feel proud to be an Indian?
Fuel price de-regulation is a welcome move for economy but govt. should also create proper infrastructure (public transport) to cut down its usage... More Nuclear Power, Sustainable Power is needed that is distributed through grids - for Electric Vehicle (personal mobility) and home consumption (electricity, hot plates for cooking, etc). Un-fortunately, here also our govt. seems to be slow (Fukushima incident, and US sponsored NGOs - if you beleive the PM, are impeding the Indian nuclear projects which were already running late).
But de-regulating fuel prices should come with improving efficiency of the PSUs, implementation of energy saving measures there, maintaining optimum staff etc..
@saurabh : that European Economy is our market too.. if purchasing power there reduces, our exports (small in comparison to China) would further reduce.
@Bomi : agree to your concerns; un-fortunately we are living in a state that is far from a welfare state (unlike the Europeans of our age)..
It is quite funny to see Govt crying on the subsidy being given to common man on one hand and finding problem in giving lavish subsidy to industrialists in the form of economic stimulus, tax exemptions. One thing is quite obvious, the toxic friendship between business barons and our politicians will go on and on irrespective of political differences. At the end, common man is always robbed of his hard earned money, thanks to majority of our politicians and business barons who are so concerned about our fiscal deficit due to the subsidy given to our farmers and common man.
We are heading towards an economic total collapse with fiscal deficit crossing 6% mark as govt has gone myopic in it`s vision and priorities has been tactonically shifted from nation`s welfare to short term political gains. Ironically, Tha light coming from the far end of this tunnel is that of train.
It beats me. Lets say I am poor wage earner of my united family. My elder brother, is, say is a retailer. his shop expense, all inclusive, is say Rs.30/-. Lets say normal profit a economic value added profit is say 15% of it so it would make sense if he wants to sell it at say Rs.35/-. But let me say that he thinks in timbaktoo the price of this product is Rs.55/-, but he is "forced" by our father to sell it 'only' at Rs. 48/- in which my father taxes him by Rs. 8/- and finally my brother says selling at 'subsidzed' price of Rs. 40/- has made him to incur 'loss'. My father too 'agrees' to it. But at the same time my brother gets status of Maharatna wherein his share holder, again my father majorly, is paid heft divident out of 'profit', but still my father and brother cries that they are subsidizing and hence i need to bear more and hence have to pay more to home, indeed I become lost. All great economists, think tanks, think oceans say my father and brothers argument is right.
Our government can even think of procuring F-22 fighters from USA to save Lockheed Martin from bankrupcy,but can not think of helping common people of this country.The ultramodern F-22 will be like AK-47 without magazines given to a kid, who would roam in his neighbourhood to display his prize possesion!
Why can't we stop diesel cars.. if people want to go luxuriously let them buy petrol cars.. why should the government subsidise diesel for such wealthy people..
Where is the end of this story. None of the Oil companies are making any
loss as they mention every time. this government is headless and does
not do any good good for the common man.
I dont think there is any need for price rise in Petroleum Product,
becoz way back in 2003 when USA attack Iraq the Crude Oil price jump to
$145 - $180 Per Barrel and I remember i used to get 3 Litre & more of
Petrol for just Rs. 100(Rs.30/Litre) in Hyderabad, Andhra Pradesh. Now
the price of Crude Oil per barrel is $88.33 (www.oil-price.net) why
there is a need to increase the petrol price, I demand for decrease
price of Petroleum product
Now President's election is over a time again for the Government to increase the prices of petroleum, LPG and diesel prices or busy in sorting out the in fights. At a juncture when there has been just no rain in the country how the step to withdraw the subsidies on the items like diesel and LPG,as it will lead to massive inflationary trends leading the lives of the common people more miserable but our economists and planners don't observe the prevailing inflationary trends. Instead the government has never bothered to save the grains from wastage instead export of wheat was allowed.It will be better if the government get rid of the in fights and give a serious thought to the problem of country facing drought.We need to think about the solution to get rid of the prevailing high rate of inflation and measures to come out of it and make people's life less miserable in.K.P. Saxena,Jaipur
Present Govt. Killing people.
Prices for LPG, Kerosene and Diesel after vice president election shows that govt. is not thinking welfare of nation, they are thinking for themselves. Huh !!!
keep on !! we will show you at 2014 election.
It is easy to blame the Central government for the inability to take a decision about fixing prices of petroleum products. But the reality is that all State governments have merrily enjoyed the upward revision of prices of thee products as their revenues from sales tax or VAT have gone up substantially over the years. Irony of this is that only the Central government has always been blamed for such price increases. Citizens’ concern about impact of such increases on inflation can well be understood but basic issue is taxation of petroleum products. We may never a control on international crude price which determines our prices of petroleum products but by implementing the right taxation policies and avoiding wasteful use of petrol and diesel we can certainly manage the situation in a much better way.
Why should government increase the prices of Diesel, LPG and Kerosene and promote the inflation in the country and in turn burden the common man? Instead, it can cut off the rich people from getting the benefit of subsidy or make a dual pricing system on these items & save the oil companies from going in to the loss. For the filthy rich people who can afford Lakhs & Crores of rupees to buy the high end diesel cars, subsidy should not be extended. And also reduce or stop the free supply of these items to ministers, MPs and MLAs. Recently I have seen a list of ministers topping the list in excess consumption of LPG at the cost of tax payers. Why not stop this stupid spending of public money? This Congress government must remember one thing that 2014 General Elections are coming and public will teach them a lesson for it’s wrong doings if it can not safe guard the welfare of common man.
The PM MMS and Congress are overly busy with issues like President, Vice
President elections than address the real issues. Congress and Sonia
will pay the price for this shortly.
Manmohan govt. has lost all the shame and lavishly donated 36
thousand crore rupees to European economy, thereby stabbing the
Indian common man in a sweet way.
The decision of the Congress Govt to postpone the increase in diesel,
LPG and kerosene prices because of the ensuing Vice president election
is not right. It indicates that winning the election is more important
than the welfare of nation. Delay of Every sinleday will strain the
national exchequer and the resultant burden will be on the common man.
It is high time for the govt to come out of this indecisiveness and
take necessary steps.Congress Govt should understand that it has got
the Mandate to run the country efficiently, rather than for winning
elections.
It is a crime against humanity to allow diesel car owners to pay subsidised diesel prices. The Government should allow subsidy on diesel only for vehicles used for public services and transportation. It is high time a dual pricing mechanism is put in place with the deserving beneficiaries being delivered the required subsidised diesel and kerosene through a foolproof administrative method where there are no leakages into the black market.
Govt is not serious in properly regulating the prices keeping in view
the inflation in prices of essential commodities with fuel price rise;
have NO rigid or logical method in hand; talk loose about subsidy to
gain support of masses, but continue heavy duties on imported crude oil
and sales tax by States - big source of revenue for them ! Most
important is to take stringent action against the corrupt who make use
of all loopholes in economy and get away with power of money muscle !
God alone can help this country establish RamRajya Gandhi dreamed !!!
The Govt. should take immediate steps to recover the amount involved in 2G scam and
other various scams which are more than enough to compensate the losses in petroleum
products instead of resorting to increasing the prices now and then thereby killing all the
progressive measures followed by all regional states which results in financial burden for
both centre and states.
Even the Private companies sell Diesel and Patrol in same rate (may be marginally difference), are they running the company for loss. They are not charities to run without profit. If they areable to make profit, then why state-own oil companies need such a huge subsidary. Moreover who asked them to advertize for the Petrol and diesel with film stars and cricket stars. Will people not go to Petrol bunk, if we don't have advertizement for diesel and patrol by the Film/cricket stars.
The hike is expected. The Govt. priorities are saving its own seat. So,
the public will have to brace for the hike. The hike is very unfortunate
since it will have cascading effects on everything in the society.
Government is serious about reducing the subsidy on oil. However I
fail to understand why government is silent when it comes to tax
holidays given to corporate companies which is more than 10 times of
subsidies given to agriculture sector and on diesel, kerosene, LPG.
Less than 1 % of total diesel is consumed by private vehicles.
Remaining 99 % is consumed by public transport and industries (again
corporate companies get benefits). Diesel's impact on WPI is .13 out
of more than 600 commodities which implies diesel will fuel inflation
which is already out of comfort zone for central bank and government.
It is a terrible situation for government to subsidize close to
1.5Lakh crores every quarter for petroleum products. Such huge
subsidies clearly discourage efforts towards renewable resources, and
at the same time subsidizes pollution/environmental damage. It is high
time that government gradually reduces these huge subsidies and make
people aware of the benefits of renewable resources. This will also
motivate car manufactures towards making more energy efficient
cars/automobiles. Without reducing the subsidy the car manufactures
are never going to think about energy efficient cars/hybrid/electric
cars (and keep producing diesel based cars). In fact environmentalist
around the world think that if fuel subsidy is eliminated there is
going to be significant push towards greener/cost-effective energy
resources.
Why should the prices of LPG, Kerosene, Diesel or Petrol be increased ? Why are there such huge losses ? Instead of increasing these prices and putting additional burden on common man, why not remove the free LPG, Diesel and Petrol subsidy that the MP's/Minister's/MLA's enjoy with public money. Also just like the private companies take back the annual salaries of all these so called Public Servants. Why Pay them when they are not doing the work they are supposed and taking the country into more debt?
Govt not serious at all; it is feasible to draw up a crude oil linked
price for petroleum products, taking into account refining / operating
costs and taxes levied by Center and States, and evolve a clear clean
formula THAT can be used to ensure there is NO ambiguity or misgiving
in the matter. Subsidy related products, can mention amount specific
and reasons thereof nor - so that as and when they are not applicable,
needed change can be made. How did the oil Co announce big profit and
bonus shares to shareholders, IF they are at a LOSS really -Strange !!
Fooling the public - help common man sure, by show slate clean and
avoid wrong statements - Remove Corruption with strong hand; all other
problems can easily be solved; May God protect our country !!
Please allow the Govt to act in increasing the prices of Diesel etc. Medicines are not known to be tasty. Yet, prescribed for cure of any ills. We will have to take it(as a Nation), our personal likings/dislikings not withstanding. It is highly unfortunate for our country that political opposition parties are just opposing the govt and misleading common men. Although, in their hearts of hearts(these political parties), they know it for sure that the prescription of Honorable PM is just right and the only remidy. Alas, they feel that is not their role. If they keep quite and don't protest, how it is possible to win sympathies of common men and win their votes in next election and capture power. Ha Ha Ha.
Is this Congress Govt. want to kill the people of this country,
remember very well 2014 elections, you will have to pay for your sins.
I am a senior citizen, I have full right to comment.
Hope this govt. will understand and take care of the people of this
country, instead of killing people in their back.
The government should try to reduce wasteful/unproductive expenditure and avoid hiking diesel, LPG and kerosene prices. Frequent increase in the prices of diesel, LPG and kerosene has led to untold sufferings to the common man. There should be a change in the mindset of bureaucrats and ruling parties towards reducing their sufferings.
1.The MASSIVE subsidy to the rich Oligarchs in the from of STIMULI
which is very huge and is THE problem has to be stopped.The stimuli
erode the WEALTH[!} of Indian Citizens.
2.The LIE.called 'under-recoveries' has to be stopped.
These two will save HUGE amounts,for the National exchequer, and the
economy will be back on track again.
M M Singh is obying the diktat.
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