EGoM discusses petrol price hike

New Delhi, May 28 (UNI) The Empowered Group of Ministers (EGoM) on petroleum, which met here today to thrash out a solution on increasing petroleum prices, discussed various options in this regard as well as bail out the oil marketing companies which are faced with huge under-recoveries.

Petroleum Minister Murli Deora, Finance Minister P Chidambaram, Chemical and Fertiliser Minister Ram Vilas Paswan, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Law Minister H R Bhardwaj are among those who participated in the EGOM, headed by External Affairs Minister Pranab Mukherjee.

None of those who participated in the discussions offered a comment to waiting newspersons.

Sources said a soluition to the tangle of price rise of petrol, diesel and petroleum products could be a multi-pronged strategy involving a reduction of custom and excise duties on petrol and petroleum products, larger quantity of oil bonds, a reduction in States levies and a hike in fuel prices.

The decision to convene the EGoM was at behest of Prime Minister Manmohan Singh. The Prime Minister met Mr Deora last evening.

The OMCs are putting pressure on the government to hike fuel prices to compensate them for the revenue loss incurred on account of skyrocketing global crude prices.

The OMCs are claiming that they will run out of borrowing limits to cover crude imports within a few months unless the government provides a rescue package soon.

The three firms -- Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) and Indian Oil Corporation (IOC) -- face huge liquidity crisis as they fail to recover full value of the products sold by them.

The state-owned OMCs are expected to lose Rs 2,00,000 crore revenue on petrol, diesel, domestic LPG and kerosene this fiscal.

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