EGoM meet on diesel price revision deferred

Sources said no timeframe has been decided for the meeting of the EGoM headed by Finance Minister Pranab Mukherjee.

The EGoM was originally scheduled to meet on December 15 but it was deferred to December-end due to non availability of certain ministers in the grouping.

Oil Ministry officials are of the view that diesel and LPG prices need to be raised in view of the surge in international oil prices.

It was expected that the EGoM may consider a Rs 2 per litre hike in diesel prices to narrow the difference between the domestic retail price of the transport fuel and its imported cost.
"The under-recovery (or the revenue oil companies lose) on diesel stands at around Rs 6.08 per litre," a source said.

Besides diesel, the oil firms lose as much as Rs 17.72 per litre on PDS kerosene sales and nearly Rs 272.19 per 14.2-kg LPG cylinder.

The necessity of a price increase has arisen because of a rally in global crude oil prices. Crude was quoting USD 91.38 in Asian trade today from USD 73-74 at the time of last revision in June.

In early December, oil marketing companies had hiked petrol prices by Rs 2.94-2.96 a litre, but it was still Rs 1.2-1.25 a litre lesser than the imported cost.

The government had in June this year freed petrol prices, but the state firms, who control 98 per cent of the retail market, continue to informally consult the oil ministry before revising prices.