Deora to meet Pranab over fuel price determination

New Delhi, Feb 2 (ANI): Petroleum Minister Murli Deora is expected to meet Finance Minister Pranab Mukherjee on Tuesday to discuss the petroleum price rise issue.

There are reports that the two ministers will talk about compensation for losses incurred by oil marketing companies that have been selling fuel at subsidised rates.

The oil-marketing companies have incurred losses amounting to Rs 430 billion in the current financial year.

Deora said on Monday that the government was trying its best to curb a rise in petrol and diesel prices in the country.

Deora further said that fuel prices will not be increased till the Kirat Parikh Committee, which was instituted for making recommendations on carrying out reforms in the oil sector, including price mechanisms, submitted its report.

"The government is very worried about increasing prices. If the prices of diesel increases by even two rupees, it will have a cascading effect on all other items," said Deora.

The overall under-recoveries so far from the last three quarters is Rs 29,000 crore, out of which upstream companies- ONGC and Oil India Ltd - contributed Rs.8, 000 crore towards losses from petrol and diesel.

The Centre has promised Rs 12,000 crore as cash for under-recoveries from kerosene and LPG, which falls short of Rs 9,000 crore for the period April to December 2009.

The total estimated under-recoveries for the current fiscal is Rs 43,000 crore, at a global oil price of $73 per barrel.

Deora further said, "Whatever the government has promised for subsidy, they have to give, bonds or no bonds," adding that the finance minister was not keen on oil bonds.

"We must find some solution to this," he claimed.

In tune with this, Petroleum Secretary S Sundareshan said that the top priority would be to guarantee that OMCs do not suffer from under recoveries.

Sundareshan further said that in the last two years, the government had paid for the losses after the contributions of upstream companies.(ANI)