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.”


Petrol price up by 70 paise a litre July 23, 2012