Despite ongoing surge in international crude oil prices,  the government has no plan “as of now” to raise domestic retail prices of petroleum products, the Petroleum Minister Murli Deora indicated on Tuesday.
“As of now there is no plan to raise oil prices,” he said in response to a query whether the government was planning to raise the retail prices of petrol and diesel.
“We are closely monitoring the situation. The Petroleum Ministry would continue to hold talks with the Finance Ministry to find out ways and means to mitigate the losses being incurred by state-owned oil firms by selling petroleum products below cost prices,” said Mr Deora.
As per an estimate state-owned oil marketing firms would be incurring under-realisation to the tune of Rs 50,700 crore in the current fiscal by selling four petroleum products-- petrol, diesel, domestic LPG and kerosene in 2007-08.
Earlier in the day Mr Deora had a meeting with the Finance Minister P Chidambaram. Both the Ministers were understood to have discussed the quantum of oil bonds the Finance Ministry should issue to oil firms to partly compensate them for the loss on fuel sales.
At least one-third of the under-recovery on fuel sale is being sought to be met through the bonds and a similar quantum would be met by discounts from upstream firms like Oil and Natural Gas Corporation Limited (ONGC) and Gas Authority of India Limited (GAIL).
Loss making unit
As per an estimate state-owned oil firms are losing about Rs 170 crore per day on sale of petrol, diesel, domestic LPG and kerosene as the government has not allowed them to raise fuel prices in tune with rise in international crude oil prices.
According to an estimate made by the Indian Oil Corporation, oil companies are selling petrol at a loss of Rs 5.24 a litre, diesel Rs 4.40 a litre, kerosene at Rs 14.67 a litre and LPG at a loss of Rs 167 per cylinder.