New Delhi, Feb 25 (PTI) With global crude oil pricesclimbing to their highest level in two-and-a-half years, OilMinister S Jaipal Reddy today said a ministerial panel willtake a call on raising petrol and diesel prices.
"There is volatility in the international market. I wishto take the matter to the Empowered Group of Ministers (EGoM)after the Budget is presented," he told reporters here.
International crude oil prices have topped USD 110 perbarrel, widening the gap between the domestic retail sellingprice and cost of production.
"Finance Minister Pranab Mukherjee, who heads the EGoM,is at present busy with Budget. The matter will be consideredby EGoM whenever he gives time (for the meeting)," he said.
The Petroleum Ministry is pinning hopes on customs andexcise duty cut in the Union Budget to avoid hiking petrol anddiesel prices.
Petrol, whose pricing was freed from government controlin June last year, is being sold at a discount of Rs 2.25 perlitre to its imported cost.
On diesel, state-owned Indian Oil Corp, Bharat Petroleumand Hindustan Petroleum lose Rs 10.74 a litre. Besides, theylose Rs 21.60 per litre on kerosene and Rs 356.07 per 14.2-kgdomestic LPG cylinder.
The three firms are currently losing Rs 430 crore per dayand at current rates are projected to end the fiscal with Rs76,559 crore revenue loss.
"Strictly speaking, companies can increase price (ofpetrol) but it in view of the volatility in the internationalmarket, it is good for everyone to wait for EGoM to decide,"Reddy said indicating that the state-run oil firms would notraise rates unilaterally.
The ministry is hoping Finance Minister Pranab Mukherjeein his Budget for 2010-11, to be presented on Monday, willabolish customs duty on crude oil and cut excise on petrol anddiesel to avoid a further increase in retail prices.
It wants customs or import duty on crude oil to bereduced to zero from 5 per cent at present.
Also it wants the customs duty on diesel slashed to 2.5per cent from 7.5 per cent at present, along with a reductionin the specific excise duty imposed on the most-consumed fuelin the country.
"Eliminating customs duty on crude and correspondinglybringing down duty on finished products would reduce theunder-recoveries (revenue loss on selling fuel below cost)that are compensated by the government," an official said.
The oil ministry is also hoping that Mukherjee wouldreduce specific excise duty of Rs 2.60 per litre on diesel andRs 12.35 a litre basic and additional excise duty on petrol.