Updated: November 2, 2011 23:35 IST

Diesel, LPG, kerosene prices too may go up

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Petroleum & Natural Gas Minister Jaipal Reddy has stated that his Ministry would push for raising the prices of LPG, diesel and kerosene. File photo
The Hindu
Petroleum & Natural Gas Minister Jaipal Reddy has stated that his Ministry would push for raising the prices of LPG, diesel and kerosene. File photo

With yet another petrol price hike looming large, the Petroleum Ministry said on Wednesday that it was up to the oil marketing companies (OMCs) to decide on the issue since the fuel has been deregulated.

On the other hand, Petroleum and Natural Gas Minister S. Jaipal Reddy has sought a meeting of the Empowered Group of Ministers (EGoM) to decide on increasing the prices of diesel, domestic LPG and kerosene due to the growing under-recoveries from the sale of the subsidised fuels.

“It is for them [OMCs] to decide… they will take a decision at a right time,” Petroleum and Natural Gas Secretary G.C. Chaturvedi told journalists here. “Petrol is a deregulated commodity whose pricing is not decided by the government. The oil companies are empowered to take a view on it.”

The OMCs — Indian Oil, Hindustan Petroleum and Bharat Petroleum — are mulling over a hike in petrol prices by Rs.1.50 a litre (excluding levies), to cover losses due to the fluctuations in exchange rates. The OMCs have raised petrol prices thrice this year – in January by Rs.2.50 a litre (against a desired hike of Rs.3.72); in May by Rs.5; and in September by Rs.3.14. In December 2010, the prices were increased by Rs.2.96 a litre against the desired hike of Rs.4.90.

To push for increase

Mr. Reddy said the OMCs losses on the sale of diesel, domestic LPG and kerosene were increasing. “The EGoM meeting would take place before the winter session of Parliament [which begins on November 22]… a decision on raising prices may not be easy,” Mr. Reddy told journalists here after meeting Finance Minister Pranab Mukherjee, who heads the EGoM.

Stating that his Ministry would push for raising the prices of the three fuels, Mr. Reddy said the OMCs stood to lose over Rs.1.30-lakh crore this fiscal on selling diesel, domestic LPG and kerosene at rates below their cost. “Oil companies will soon find it difficult to get loans from Indian banks, let alone foreign banks… the companies are borrowing heavily to meet even working capital requirements as fuel selling price does not meet even operating expenses,” he pointed out.

As on November 1, 2011, the under-recovery in the case of diesel stands at Rs.8.58 a litre; kerosene at Rs.25.66 a litre; and domestic LPG at Rs.260.50 a cylinder. Today, the OMCs are incurring a daily under-recovery of about Rs.319 crore on the sale of the three subsidised items. In the first half of the current fiscal (April-September 2011), the OMCs reported a total under-recovery of Rs.64,900 crore — Rs.37,719 crore on diesel, Rs.13,361 crore on kerosene and Rs.13,820 crore on domestic LPG.

I just have one question. Why should the subsidy being given to private diesel car owners? They are 15% of the diesel consumers across nation. Just provide the subsidy to the public run diesel vehicles. Let the private car owners share this burden. Atleast this can help to certain extent.

from:  Jagadeesh Kumar
Posted on: Nov 4, 2011 at 16:51 IST

it is high time that all the vehicles allotted to the MPs and MLas are withdrawn and they should also made to travel in the public transport systems to attend thier routine .

from:  T R Subramanian
Posted on: Nov 4, 2011 at 00:46 IST

Two wheeler users and autorickshaws subsidizing rich SUV and car owners. Diesel should be deregulated at the earliest to be fair.

from:  B S Kumar
Posted on: Nov 3, 2011 at 23:16 IST

It is a shame to subsidize fuel. Poor people are paying taxes on rice and even salt and that money is used to subsidize petrol and diesel for the rich. Majority of indians don't own a car or a truck. The fuel marketing companies are not aliens, each and every indian own a part of it. they are losing money means the poor are loosing money. Insted of subsidizing fuel, the govt should subsidize and encourage public transport systems like buses and trains.

from:  siju
Posted on: Nov 3, 2011 at 16:37 IST

Petrol and gas prices hike,oil companies say, its inevitable, do they think commom man to be fools who never say anything,there are ways which this can be dealt with,control the unnecessary wastage of petrol and gas made by the so called millinaires and billionaires.I don't understand why it is people like us who work hard to earn money should always bear the brunt of all crises.There is a limit for everything, hope the govrnment understands it. When one V.I.P.'slife has to be protected by too many securities, who inturn use a lot of petrol, why does public who has only one vehicle, always pay more and more for transportation.Governments should strive to make peoples life happy not more and more miserable.

from:  Rm.Hemalathaa
Posted on: Nov 3, 2011 at 11:03 IST

Too many price increases in last one year shows the inefficiency of the government to control inflation. This is also due to free distribution of gas with cylinders by the previous government which purely does with the intention to retain power, country is paying the price ultimately.

from:  Rahul
Posted on: Nov 3, 2011 at 10:38 IST

In India 42% people live under poverty line. Here oil companies determine the diesel kerosene price. Ministry of petroleum is for what? Govt should immediately change their way of rulling the poor people of this country. This is unfortunate. What ever the reason is they can not increase the price of diesel kerosene LPG.

from:  Prasenjit Guchhait
Posted on: Nov 3, 2011 at 09:58 IST

It is reported in the news that the oil price is gone upto $109 or so hence increase in price is inevitable. I have doubt that there are two prices for the crude. The sweet crude is selling well below the brent crude. Why not we take the price of sweet crude and fix up the price. Why we are taking the higher end of crude price and inform the people the the crude price is so high. What is the need to purchase higher cost crude when low price crude is available? Is it not possible to import more sweet crude and less brent crude and maintain the price within the control.

from:  Robert
Posted on: Nov 3, 2011 at 07:45 IST

First of all the decision on fuel price should not be entrusted to OMCs. It should be restored to the Petroleum Ministry. The powers entrusted to OMCs are used cunningly by OMCs ( Indirectly by the Govt.)and not aimed for doing anything good to the public. It is very much harmful to the economy of the nation. Perhaps the Government has shifted the powers to OMCs as an escapism. This is high-time, the issue has to be reviewed thoroughly and remedial measures taken immediately to stabilise the economy of the nation in large.

from:  Purushothaman.v
Posted on: Nov 3, 2011 at 07:19 IST

Surprisingly luxry disel cars. many of whose filthy rich owners go to the extent of paying lacks of rupees extra on getting VIP registration numbers,are being allowed to run on subsidy fuel. The government, if it is clean and has no underhand deal with disel car manufacturing companies, can easily recover the subsidy amount by taxing diesel car owners on an average of a thousand or so liters' diesel use per annum.

from:  balvinder
Posted on: Nov 3, 2011 at 06:12 IST

It seems Congress party is getting heavy donations from Oil companies. Now a days, S Jaipal Reddy, accepts any increse by the Oil companies. In US Gas price went above $4 and now it is $3.20, but in India price never goes down. Why is that ?

from:  Naresh Dhiman
Posted on: Nov 3, 2011 at 04:59 IST
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