Even as the cycle of protests triggered by the hike in the price of petrol threatened to engulf various parts of the country, Petroleum and Natural Gas Minister Jaipal Reddy cut short his visit to Turkmenistan and decided to return to India a day earlier than scheduled.
Officials in the Petroleum Ministry said the meeting of the Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee could meet “very soon” to take a call on hiking diesel and domestic LPG cylinder prices to cut down the subsidy bill and the losses of the state-run oil marketing companies (OMCs).
The OMCs on Wednesday effected a steep hike of Rs.7.54 per litre in petrol prices. Interestingly, the EGoM has not met in almost a year even though depreciation of the rupee and rise in international oil prices raised the cost of imports.
It is learnt that the Finance Ministry had sounded the Petroleum Ministry on an EGoM meeting, asking for the availability of Mr. Reddy. As Mr. Reddy was away in Turkmenistan to sign the TAPI gas sales purchase agreement, it was decided to wait for his arrival and take a call on the issue. Mr. Reddy is understood to have cut short his visit by a day.
The government, shaken by the reaction to the petrol price hike, on Thursday asked the OMCs to explain the rationale behind such a big hike. OMCs are now losing Rs. 512 crore a day on selling diesel, domestic LPG and kerosene. Diesel is now sold at a loss of Rs. 15.35 a litre, kerosene at Rs. 32.98 per litre loss and oil firms lose Rs. 479 on the sale of every 14.2-kg domestic LPG cylinder.
