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Rediff.com  » Business » No diesel price hike for now, says Reddy

No diesel price hike for now, says Reddy

Last updated on: June 08, 2012 19:03 IST

Still battling the fallout of last month's steep Rs 7.54 a litre hike in petrol price, the government on Friday said it is not considering raising rates of diesel, domestic gas (LPG) and kerosene for the moment.

"I will only say there is no thinking on this matter. No date for meeting of Empowered Group of Ministers (EGoM) has been fixed," Oil Minister S Jaipal Reddy told reporters in New Delhi.

The EGoM on fuel prices, headed by Finance Minister Pranab Mukherjee, has not met since June last year even though depreciation in the rupee and rise in international oil prices have raised the cost of imports.

"On this date, there is no thinking. No EGoM meeting has been fixed," Reddy said.

The criticism of May 24 petrol price hike has not ended even after a Rs 2.02 a litre dip in rates this month. BJP called for Jail Bharo agitation from June 22 demanding a complete rollback.

State-owned oil companies at present lose Rs 475 crore (Rs 4.75 billion) per day on selling diesel, domestic LPG and kerosene. Diesel is being sold at a loss of Rs 14.09 a litre, kerosene at Rs 32.06 per litre loss. Oil companies lose Rs 396 on sale of every 14.2-kg domestic LPG cylinder.

IOC, HPCL and BPCL had together lost Rs 138,541 crore (Rs 1385.41 billion) in  revenue in 2011-12. This year they are projected to lose a record Rs 178,498 crore (Rs 1784.98 billion).

The EGoM had in June 2010 taken an in-principle decision to deregulate or decontrol diesel prices but its implementation was deferred.

The minister had recently stated that he was urging Mukherjee to convene meeting of EGoM soon. Reddy said he was not considering dual pricing of diesel -- subsidised price for trucks and another rate for high-end luxury cars and power gensets, as it was not practical to implement.

Also, his proposal for levying a one-time duty of Rs 80,000 on diesel cars was under consideration of the Finance Ministry.

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