New Delhi, Jan 18 (UNI) A decision on the retail fuel price hike was deferred last night as a crucial meeting of the Empowered Group of Ministers (EGoM) remained inconclusive , Petroleum Minister Murli Deora said.
''The EGoM will meet again in the next 1-2 days,'' Mr Deora had said.
The EGoM, headed by External Affairs Minister Pranab Mukherjee, had to consider a proposal by the oil marketing companies who reportedly called for an increase of Rs 4 and Rs 2 a litre in petrol and diesel prices.
Since its formation in November, the EGoM had met for the first time yesterday. Its meetings were postponed twice for various reasons.
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.
Last time the prices were increased by this amount, political pressure forced a rollback.
Hiking fuel prices will not be easy as fears of inflation creeping back is playing on the minds of the decision makers.
C Rangarajan, the head of Prime Minister Manmohan Singh's Economic Advisory Council (EAC) yesterday raised fears that the headline WPI inflation rate will be above four per cent if petrol prices are revised.
However, a moderate increase of Rs 2-2.50 on petrol and Rs 1-1.50 on diesel seems to be in the offing.
The increase could be on the lower side if the decision to increase prices comes with duty rationalisation.
The Finance Minister P Chidambaram is, however, not very keen on cutting duties on oil as the fiscal year is nearing its end and a considerable amount of government revenue comes in the form of these taxes.
The Indian basket of crude oil touched an all time high of 100 dollars a barrel on january 3, 2008 and the oil marketing companies are expected to close the fiscal with a total loss of Rs 69,753 crore.
Retail prices of petrol in Delhi is at Rs 43.52 and diesel is at Rs 30.48.
UNI SBA/MP PBB SSC1132