New Delhi, Jan 16: The government is likely to hike prices of petrol and diesel by Rs four and Rs two per litre respectively as global crude oil prices continued to surge, hitting the revenues of domestic oil marketing companies (OMCs).
An announcement to this effect is likely to be made by the government very soon. Giving a tacit go-ahead for a fuel price hike, the ruling Congress last evening had said that all steps would be taken to minimise the impact on the common man. ''The Congress party wish to put on record its hopes that the government will take all steps to minimise and soften, to the maximum degree possible, any impact of the global rise in oil prices,'' AICC Spokesman Abishek Manu Singhvi said, in a virtual endorsement of the hike proposal.
Dr Singhvi said the government should take all reasonable steps within the larger macro economic perspective. "Any decision on the issue should be based on overall national perspective," he said.
He said the entire hike in the international prices of oil should not be passed on to the consumer. Earlier in the month Petroleum Minister Murli Deora had said hiking retail prices of oil is not the only solution to combat the rising prices of crude oil and the government was also considering duty cut to deal with the situation.
''We have to find the best solution and we are considering duty cuts to deal with the situation,'' Mr Deora said. Mr Deora said the government has been in touch with all parties on the issue and the Left parties were ready to co-operate with it to find a solution to the problem of surging oil prices.
Petroleum Secretary M S Srinivasan had said prices of petrol and diesel are expected to go up by Rs four and Rs two per litre respectively. The government had last increased petrol and diesel prices on June 6, 2006. With the crude oil prices touching an all-time high, the government was reluctant to increase the fuel prices because of the Assembly elections in Gujarat and Himachal Pradesh.
The crude oil prices in the international market touched an all time high of 100 dollars-a-barrel on January 3, 2008. Mr Deora said the matter was of serious concern for the government and said Group of Ministers (GoM) headed by External Affairs Minister Pranab Mukherjee had already met to take a final call on the fuel prices.
The high-powered GoM was formed by Prime Minister Manmohan Singh late last month which is to report back to the Cabinet. The other members of the GoM include Defence Minister A K Antony, Finance Minister P Chidambaram, Railway Minister Lalu Prasad, Road Transport, Highways and Shipping Minister T R Baalu, Consumer Affairs Minister Sharad Pawar and the Petroleum Minister.
Petroleum Minister Murli Deora earlier met Finance Minister P Chidambaram to discuss measures to cope with the record crude oil prices, as the country imports over two-thirds of its oil.
The three government-owned OMCs such as Indian Oil, Bharat Petroleum and Hindustan Petroleum are projected to lose Rs 69,753 crore on sale of petrol, diesel, LPG and PDS kerosene as the government has not allowed them to raise prices in line with the price of imported crude.
Petrol is being sold at a loss of Rs 8.74 a litre, diesel at Rs 9.92 per litre, kerosene Rs 20.53 a litre and LPG at a loss of Rs 256.35 per cylinder.