GoM on fuel prices put off

New Delhi, Jan 21 (UNI) The Group of Ministers (GoM) to take a final call on hike in retail fuel prices which were expected to meet here today have rescheduled their meeting which is likely to take place only next week.

The recommendations of the GoM will be forwarded to the Cabinet, that will announce the much awaited decision on fuel hike, as it has not been increased for the last 18 months despite spiralling international crude oil prices and mounting under-recoveries of oil marketing companies (OMCs).

The GoM had met last Thursday to finalise the proposed price hike, but the meeting remained inconclusive.

External Affairs Minister Pranab Mukherjee who heads the GoM will be busy this week, as various foreign dignitaries are visiting the country including British Prime Minister Gordon Brown and French President Nicholas Sarkozy.

As a result of these visits, the decision is likely to be deferred until next week, sources said here.

Besides, Petroleum Minister Murli Deora would be leaving for London tomorrow for a road show to auction oil and gas blocks under the NELP-VII programme.

He 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 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 RK1856