GoM on fuel prices to meet tomorrow

New Delhi, Jan 20 (UNI) The Group of Ministers (GoM) that will meet here tomorrow to take a final call on hike in retail fuel prices is expected to submit their recommendations to the Cabinet for its nod this week.

''The GoM is most likely to recommend a rise in retail prices of petrol and diesel this week,'' Petroleum Secretary M S Srinivasan said.

The GoM met on Thursday to finalise the proposed price hike, but the meeting remained inconclusive and is now scheduled for tomorrow.

With the pressure mounting on the government due to skyrocketing global crude oil prices, Petroleum Minister Murli Deora on Friday said the hike in retail fuel prices will be minimal.

''We will ensure that the price hike is minimal so that the consumers do not complain and the oil marketing companies do not suffer heavy losses,'' Mr Deora had said.

He said the global crude prices have already crossed the 100 dollar mark.

The government has meanwhile issued bonds worth Rs 11,256.92 crore to three state run oil marketing companies (OMCs) to ease the burden of OMCs which is due to spiralling global oil prices.

Indian Oil Corporation will receive the '7.95 per cent OMCs Special Bonds, 2025' for Rs 6,362.25 crore and Bharat Petroleum Corporation Ltd (BPCL) for Rs 2,539.13 crore, while Hindustan Petroleum Corporation Ltd (HPCL) for Rs 2,355.54 crore.

The GoM, headed by External Affairs Minister Pranab Mukherjee, had to consider a proposal by the oil marketing companies (OMCs) which reportedly called for an increase of Rs four and Rs two a litre respectively in the prices of petrol and diesel.

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 cost 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.

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 Rs 43.52 per litre and diesel is Rs 30.48 per litre.

The government had last increased fuel prices in June 2006, when retail petrol prices went up by 9.2 per cent and diesel by 6.6 per cent to offset losses at state firms after being frozen for nine months.

UNI SBA RT PDT AS1216