<p>Lack of political consensus has forced the Empowered Group of Ministers (EGoM) to defer the decision on the proposed hike in the prices of four mass-consumed petroleum products—petrol, diesel, domestic LPG and kerosene. <br /><br />The EGoM headed by Finance Minister Pranab Mukherjee was scheduled to take a call on Monday on the Kirit Parekh committee report that recommended freeing prices of petrol and diesel from government control, besides asking for a steep hike in domestic LPG and kerosene rates.<br /><br />“The EGoM came to the conclusion that further discussion will be necessary before views are firmed up. A further meeting will be scheduled shortly,” Petroleum Minister Murli Deora told newspersons on Monday after the meeting.<br /><br />Deora declined to reply when asked whether the decision on oil price hike was deferred because of the lack of political consensus among the key allies of the UPA. However, it was learnt that the EGoM felt the need for further talks on building a consensus as to what extent the Parekh committee’s recommendations could be accommodated.<br /><br />The government appears to be keen on raising petro prices to cut down oil subsidy and simultaneously help state-owned oil marketing companies (OMCs), which are currently incurring revenue losses by selling oil products below cost prices. Key allies like the Trinamool Congress (TMC), Nationalist Congress Party (NCP) and Dravida Munnetra Kazhagam are understood to have opposed the move.<br /><br />The unhappiness of the allies was evident on Monday as TMC chief and Railway Minister Mamata Banerjee and NCP chief and Agriculture Minister Sharad Pawar did not attend the EGoM meeting. Another major factor that seemed to have influenced the EGoM decision was the likely cascading effect of the oil price hike on inflation.<br /><br />Deora himself admitted that a presentation was made to the EGoM on the recommendations of the Parekh committee and the “possible inflationary impact” of a rise in the prices of petroleum products. <br /><br />According to the ministry, under-recoveries suffered by OMCs on account of the present price structure and the burden faced by the government by way of compensating the companies during the period from 2003-04 to 2009-10 was more than Rs 3.45 lakh crore. <br /><br /></p>
<p>Lack of political consensus has forced the Empowered Group of Ministers (EGoM) to defer the decision on the proposed hike in the prices of four mass-consumed petroleum products—petrol, diesel, domestic LPG and kerosene. <br /><br />The EGoM headed by Finance Minister Pranab Mukherjee was scheduled to take a call on Monday on the Kirit Parekh committee report that recommended freeing prices of petrol and diesel from government control, besides asking for a steep hike in domestic LPG and kerosene rates.<br /><br />“The EGoM came to the conclusion that further discussion will be necessary before views are firmed up. A further meeting will be scheduled shortly,” Petroleum Minister Murli Deora told newspersons on Monday after the meeting.<br /><br />Deora declined to reply when asked whether the decision on oil price hike was deferred because of the lack of political consensus among the key allies of the UPA. However, it was learnt that the EGoM felt the need for further talks on building a consensus as to what extent the Parekh committee’s recommendations could be accommodated.<br /><br />The government appears to be keen on raising petro prices to cut down oil subsidy and simultaneously help state-owned oil marketing companies (OMCs), which are currently incurring revenue losses by selling oil products below cost prices. Key allies like the Trinamool Congress (TMC), Nationalist Congress Party (NCP) and Dravida Munnetra Kazhagam are understood to have opposed the move.<br /><br />The unhappiness of the allies was evident on Monday as TMC chief and Railway Minister Mamata Banerjee and NCP chief and Agriculture Minister Sharad Pawar did not attend the EGoM meeting. Another major factor that seemed to have influenced the EGoM decision was the likely cascading effect of the oil price hike on inflation.<br /><br />Deora himself admitted that a presentation was made to the EGoM on the recommendations of the Parekh committee and the “possible inflationary impact” of a rise in the prices of petroleum products. <br /><br />According to the ministry, under-recoveries suffered by OMCs on account of the present price structure and the burden faced by the government by way of compensating the companies during the period from 2003-04 to 2009-10 was more than Rs 3.45 lakh crore. <br /><br /></p>
