Deora meets PM, FM on fuel prices

New Delhi, Oct 8 (UNI) Petroleum Minister Murli Deora today met Prime Minister Manmohan Singh and discussed the possible hike in fuel prices along with issuing of oil bonds to the oil marketing companies (OMCs) who are incurring heavy losses due to surging global crude oil prices.

Mr Deora also met Finance Minister P Chidambaram during the talks prompted by the rising oil prices in international market.

However, the Petroleum Minister has ruled out any hike, stating that the government was committed to protect the interests of consumers as per the directions of UPA chairperson Sonia Gandhi.

The meeting is expected to finalise fate of the OMCs who are demanding oil bonds to offset their mounting losses.

It is learnt that the meeting would also discuss a possible restructuring of excise duty structure on diesel. The proposals were discussed between Mr Chidambaram and Mr Deora and the Finance Ministry was very positive on this issue.

Petroleum Secretary M S Srinivasan had said the government may may issue oil bonds worth Rs 12,000 crore by October 15, to partly offset the rising revenue losses incurred by the state-owned refiners for selling fuels below cost to retail consumers.

''A joint exercise between the petroleum ministry and finance ministry is going on. We keep apprising the cabinet on revenue losses so that the bonds can be released,'' Mr Srinivasan had said.

He had said the government is monitoring the skyrocketing prices of crude oil in the international market, which is a concern.

Mr Srinivasan had said the total under-recovery on sale of petrol, diesel, domestic LPG and kerosene would be about Rs 55,000 crore in 2007-08.

The public sector oil firms are losing around Rs 190 crore a day on sale of petrol, diesel, domestic LPG and kerosene as the government has not allowed them to raise prices in step with rise in international crude oil price.

They are demanding an increase of Rs 4.68 a litre in diesel prices, Rs 2.90 on gasoline, and a nearly threefold increase in kerosene prices and Rs 174.75 on a 14.2 kg cylinder of liquefied petroleum gas (LNG).

UNI