State oil firms also appear to have applied brakes on hike in petrol price after inflation in May topped 9.06%. Oil firms, which last month hiked petrol price by a steep INR 5 per liter, are losing INR 1.98 a liter on a commodity which was freed from government control last June.
Oil Minister S Jaipal Reddy said no dates for the meeting of an Empowered Group of Ministers, which is the decision making body for revision in rates of diesel, domestic LPG and kerosene, has been fixed yet. He told reporters that "We are still exchanging notes (with finance ministry).”
Mr Reddy had on June 14 met Prime Minister Manmohan Singh to push for an early decision on fuel price revision in view of mounting losses of state oil firms. The EGoM headed by Finance Minister Pranab Mukherjee has not met since June last year even though crude oil prices have spiraled upward by about 50%.
Mr Reddy who had earlier this month met Mukherjee for early convening of the EGoM meeting, said no dates have been fixed yet. State owned fuel retailers Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum together lose about INR 450 crore per day on selling diesel, domestic LPG and kerosene at government-controlled prices, which have been set at way below market rates.
The three firms are virtually living off borrowed money as current realization on fuel sales is not sufficient to meet the cost of importing raw material (crude oil). The Oil Ministry has been pushing for an increase in diesel, domestic LPG and kerosene rates and wants the government needs to muster the political will to take the hard decision.
The EGoM was originally scheduled to meet on May 11, but was postponed at the last moment. There was talk of an EGoM which comprises representatives of all major allies in the ruling UPA meeting on June 9, but the meet was never scheduled for that day. Mr Reddy said no new date for the EGoM meeting has been fixed yet.
His ministry is pushing for INR 3 to INR 4 per liter hike in diesel and a INR 20 to INR 25 per cylinder increase in LPG rates. Also, it is looking at a possible hike in kerosene prices. State owned oil firms had last month hiked petrol prices by a steep INR 5 per liter and are looking another increase as they are losing a little less than INR 2 per liter on a commodity that was freed from government control in June last year.
Petrol prices were decontrolled June last year and IOC, BPCL and HPCL have the freedom to fix retail rates. Oil companies are losing INR 15.44 on the sale of every liter of diesel at the current price of INR 37.75 per liter in Delhi. In addition, state oil firms lose INR 27.47 per liter of kerosene and INR 381.14 per 14.2 kg domestic LPG cylinder.
(Sourced from Moneycontrol.com)
