Business

Ministry seeks Cabinet direction on fuel pricing

— PHOTO: V. V. KRISHNAN

IN TIGHT SPOT: Union Petroleum Minister Murli Deora (right), with R. S. Pandey, Secretary, Ministry of Petroleum and Natural Gas, addressing the Economic Editors Conference in New Delhi on Wednesday.

NEW DELHI: The Petroleum and Natural Gas Ministry on Wednesday said no final decision had been taken on fuel price revision and the Ministry would soon approach the Union Cabinet seeking its directions on the matter as under-recoveries had changed into over-recoveries for oil marketing companies (OMCs) in the case of petrol and diesel, while they are still suffering losses in the sale of LPG and kerosene.

Addressing journalists at the Economic Editors Conference here, Petroleum Secretary R. S. Pandey said his Ministry would present a note to the Cabinet Committee on Economic Affairs (CCEA) giving a comprehensive picture of the prevailing market conditions. He, however, refused to divulge details about how much reduction it would seek in the prices of petrol, diesel and domestic LPG.

“No doubt under-recoveries have converted into over-recoveries after steep fall in international crude oil prices from $147 to around $50 a barrel. Today, OMCs are benefiting Rs. 8.17 a litre on sale of petrol and 65 paise on diesel. However, there is still a loss of Rs. 21.54 a litre in the case of kerosene and Rs. 330.28 a cylinder of LPG. On the basis of the current prices, under-recoveries by OMCs this fiscal would be around Rs. 1.10-lakh crore. We have to present all these details before the CCEA and seek its directions on the issue,” Mr. Sharma.

If the current crude oil prices remain unchanged till March 2009, OMCs would make over-recoveries worth around Rs. 3,400 crore from the sale of petrol and Rs. 1,200 crore from diesel. However, due to higher subsidy on LPG and kerosene, under-recoveries from these items would be Rs. 10,000 crore and Rs.8,700 crore. As a result, between November and March 2009, OMCs would lose Rs. 14,000 crore.

Refusing to clarify on media reports whether he had written to Congress President Sonia Gandhi on fuel price revision, Petroleum and Natural Gas Minister Murli Deora said he had been getting representations from Congress leaders seeking revision in fuel prices in view of declining crude prices and people were anticipating reduction in fuel prices. Referring to the Election Commission’s notice to him over his Tuesday’s remark on lowering of fuel price, Mr. Deora said he was upset over these reports.

Talking about the strike call given by officers of government-owned oil companies on the issue of salary hike, Mr. Deora urged them not to go ahead with their agitation as the Government was looking into the matter.

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