“There's fear that if it's done now, there will be an uproar in Parliament”
Despite an uproar by Opposition parties inside and outside Parliament, the Petroleum and Natural Gas Ministry is likely to undertake a further, but minor, hike in the prices of petrol after the conclusion of Parliament's monsoon session in the first week of September.
Officials sources said here the recent spurt in international crude oil prices had not helped the situation and the Oil Marketing Companies (OMCs) were losing around 50 paise to Re. 1 per litre on petrol. The average crude oil basket is around $81 per barrel and shows no signs of moderating.
“We are looking at the situation closely and will review the price line in the first week of September. There is a fear that if it is done now, there will be an uproar in Parliament,” a senior official remarked.
After it decontrolled petrol prices on June 25, the government contemplated issuing guidelines to the OMCs for adjusting the price of petrol against the movement of crude oil price in the international market. However, those guidelines are still to come. The State-owned OMCs — Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited — are likely to raise petrol prices by at least Re.1 per litre by early next month. A hike is imminent to keep the mounting under-recoveries under control.
“Petrol price hike is imminent. Only the quantum of increase will have to be decided. At the beginning of this month, under-recoveries on petrol stood at 50 paise per litre, which has now gone up to Re. 1. This is something that OMCs now want to pass on to the consumers under the new pricing regime.”
Global crude prices have been rising for the past few weeks on hopes of recovery in energy demand. Crude price for September contract on the New York Mercantile Exchange is trading around $82 a barrel.