Hike in petrol, diesel prices on the cards

“At current prices (of imported crude) we will be required to increase the prices of petroleum products,” Deora, assisted by Petroleum Secretary S Sundareshan, told a press conference here after a meeting of the Consultative Committee of MPs attached to his ministry.
Deora stated that Monday’s discussion was mainly about the three main public sector Oil Marketing Committees (OMC) and their burgeoning ‘under-recoveries’, which during 2009-10 ran into Rs 46,051 crores. Under-recoveries is a euphemism for losses the Centre incurs on subsidising the prices of petroleum products, including LPG and kerosene.Of this huge amount, the Centre had reimbursed the OMCs Rs 26,000 crores by way of cash.

He stressed that his ministry was keen to protect the interests of the “aam aadmi” by bearing the losses stemming from subsidies on cooking gas and kerosene. But when kerosene was priced so low for the poor, the Centre will crack down on adulterators.  
But, “now we do not know how the crude oil price will move,” Sundareshan chipped in to add. “If crude oil price touched $85 per barrel, then OMCs’ under-recoveries at that level would shoot up to Rs 1 lakh crores,” he said.

Deora added that the EGoM, headed by Finance Minister Pranab Mukherjee, will look into all aspects and take a decision. The recommendations of the Kirit Parikh Committee for a “viable and sustainable system for pricing petroleum products” were also under the EGoM’s consideration, he added.
DH News Service