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Increase in oil price deferred for now

Special Correspondent

NEW DELHI: The United Progressive Alliance government has deferred oil price hike for the present.

Highly placed sources said Prime Minister Manmohan Singh had asked the Petroleum and Finance ministries to work out a formula which would not burden the common man.

Congress president and UPA chairperson Sonia Gandhi directed Petroleum Minister Murli Deora not to increase petrol and diesel prices, especially in view of the festival season.

“The festival season is currently on. This, coupled with the winter session of Parliament beginning next week and the All-India Congress Committee session on November 17, will make it virtually impossible for the government to effect an oil price hike. Elections in Gujarat and Himachal Pradesh are also due next month and the Congress cannot afford to annoy voters at this juncture,” a senior official said.

The sources said both Dr. Singh and Ms. Gandhi, during their meetings with Mr. Deora, asked him to avoid any harsh measure and find other ways of dealing with the unprecedented rise in international crude prices.

“We are trying to see if we can find a solution by next week. The government is very much alive to the problems faced by our oil marketing companies. We are trying our best to find a solution,” Mr. Deora told newsmen at the India-Africa Hydrocarbon Conference here on Wednesday.

Petroleum Secretary M.S. Srinivasan said the under-recoveries of oil companies were estimated to increase to Rs. 70,500 crore for a full fiscal year on current prices, up from the projected Rs. 54,000 crore.

Indian Oil Corporation Chairman and Managing Director Sarthak Behuria said the company was losing Rs. 122 crore a day on selling fuel below cost.

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