NEW DELHI: Union Petroleumand Natural Gas MinisterMurli Deora said on Mondaythat decontrolling the pricesof petroleum products washigh on the agenda of hisMinistry, but ruled out anyimmediate increase in theprices of petrol and diesel tomake up for the losses sufferedby oil marketing companies.
"We are awaiting the reportof the expert committee,headed by Kirit Parikh, constitutedto look into the issueof pricing. The committee isexpected to submit its reportthis week, and only then willthe government decide onfreeing petrol and diesel prices,"he said.
Mr. Deora said he wouldmeet Finance Minister PranabMukherjee on Tuesday todiscuss compensation to theoil companies. The issue ofdecontrol would also be discussed.
"We are trying our best tosee that the prices are notraised. But a rate hike maybecome inevitable, as the government'slimited financialresources are not enough tomeet the loss on account ofrevenue lost on selling petrol,diesel, LPG and kerosene belowcost. The Cabinet had, inJuly 2009, decided that thegovernment will meet all ofthe under-recovery [revenueloss] on domestic LPG andkerosene either throughbonds or in cash, and thesame on petrol and diesel wasto be met by upstream companieslike Oil and NaturalGas Corporation (ONGC)," hesaid.
While the ONGC, the OilIndia Corporation and theGas Authority of India Limited(GAIL) bore the entireRs.8,364-crore under-recoveryon petrol and diesel in thefirst three quarters of the currentfiscal, the Centre hadagreed to give only Rs.12,000crore in cash against theRs.20,989 crore loss on cookingfuel during April-December.
Mr. Deora said there weresome who were advocatingfreeing petrol and diesel priceswhile the government andupstream companies togethersubsidised LPG and kerosene."The government isextremely conscious of the effectof any increase in fuelprices. But there is an urgentneed to find a permanent solutionto this recurring problemof under-recoveries."The newly appointed PetroleumSecretary, S. Sundareshan,said it was estimatedthat the total revenue loss onthe four products this fiscalwould be more thanRs.45,500 crore. The threefirms were projected to loseRs.17,422 crore on keroseneand Rs.14,152 crore on LPG.