Big hike in diesel, LPG prices on the anvil

A week after the steep hike in petrol prices by Rs 5 a litre, the government on Monday said a ministerial panel is likely to meet in the next few days to take a decision on raising diesel, LPG and kerosene rates.

An Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee is likely to deliberate on the oil ministry's demand for a minimum Rs 4 a litre hike in diesel prices and a Rs 25 per cylinder increase in LPG rates to partly bridge the gulf between domestic prices and their international cost.

"I think the EGoM meeting on diesel pricing will be called this week," Agriculture Minister Sharad Pawar, who is also a member of the ministerial panel, told reporters on the sidelines of an ICAR-CII event in New Delhi.

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Asked if it was apt to hike diesel prices at a time of high inflation, Pawar said, "I can't react now as we have to assess the situation -- we have see whether petroleum companies are earning or losing. We have to see how recent happenings in Gulf countries have created problems for India."

Inflation stood at 8.66 per cent in April.

The EGoM was originally scheduled to meet on May 11, a day after polling in West Bengal ended, but the panel's meeting was postponed and no new dates have been intimated yet.

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Oil companies are losing Rs 18.19 on the sale of every litre of diesel at the current price of Rs 37.75 per litre in Delhi.

In addition, state oil firms lose Rs 29.69 per litre of kerosene and Rs 329.73 per 14.2-kg domestic LPG cylinder.

Recently, Pranab Mukherjee had stated that the meeting of the EGoM on diesel pricing will be held this week.