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October 08, 2007 19:08 IST
Industry body Assocham proposed on Monday for a hike in fuel prices as a step to enable Oil Marketing Companies to restrict their losses within the present estimated amount of Rs 55,000 crore (Rs 550 billion).
With the increase of $10 in per barrel price of crude oil from $80, which is bound to further raise oil companies losses to about Rs 70,000 crore (Rs 700 billion) by March 31, 2008, Assocham said in a statement "the time has ripened for the government to pass on the burden of crude prices on common man in phases."
It suggested a minimum hike of Rs 1 and Rs 2 per litre in prices of diesel and petrol and Rs 20 increase in per LPG cylinder.
The chamber is of the view that the proposed hike is likely to generate revenues for OMCs to the extent of Rs 15,000 crore (Rs 150 billion) in the remaining period of current fiscal, in the absence of which total OMCs losses would go around Rs 70,000 crore (Rs 700 billion).
"It's worst victim would be the Indian Oil Corporation [Get Quote] which presently is accruing daily losses of Rs 100 crore (Rs 1 billion) on selling petroleum products at subsidised prices," Assocham President Venugopal N Dhoot said.
The above suggestion has been mooted by the chamber to the petroleum and natural gas ministry for consideration in national interest even if it attracts widespread criticism from public at large.
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