EGoM meeting on fuel price hike postponed by a week

Oil sector PSUs may raise petrol prices by up to Rs.3 in two-three days

With a crucial meeting of the Empowered Group of Ministers (EGoM) on fuel price hike postponed by a week, a decision on increasing the prices of diesel and domestic LPG prices will be taken only by May 17 or 18. However, petrol prices, which were deregulated by the government, can go up in next few days. The EGoM is headed by Finance Minister Pranab Mukherjee

“The EGoM was to meet on Wednesday evening [May 11]…it has been put off. It has been postponed to accommodate some Ministers...It could be anytime on [May] 17 or 18,” Petroleum and Natural Gas Minister S. Jaipal Reddy told journalists here on Tuesday. The EGoM was to meet to consider hiking the diesel price by Rs.3-4 a litre and domestic LPG rates by Rs.20-25 a cylinder.

However, the government-owned oil marketing companies may raise petrol prices by up to Rs.3, which has been not revised since January, in the next two-three days.

Though the government had freed petrol prices in June 2010, the oil sector PSUs continue to be guided by informal advice from the government.

The PSUs are now losing about Rs.9 a litre on petrol, Rs.16.17 a litre on diesel, Rs.29.69 a litre on kerosene and Rs.329.73 a 14.2-kg domestic LPG cylinder.

Mr. Reddy said the day EGoM met, a Group of Ministers (GoM) that is vetting London-listed Vedanta Resources' $9.6 billion acquisition of Cairn India, may also meet.

“I think when the next date is fixed, on that day itself we will deal with both questions — the question of under-recoveries of oil companies and the question of government approval to Cairn-Vedanta deal,” he said.