[1]A significant hike in the prices of petrol and diesel are on the cards following the hike in the price of natural gas on Wednesday. An empowered group of ministers (eGoM) constituted by the Prime Minister, Dr Manmohan Singh, will meet on June 7 to decided on the issue of liberalising prices of auto fuel as recommended by the Kirit Parikh committee.
The petroleum ministry and the planning commission have been in favour of implementing the Kirit Parikh report. The petroleum ministry had proposed freeing the prices of petrol and diesel along with an increase in the prices of LPG and kerosene.
The oil marketing companies are currently losing over Rs 6 per litre on the sale of both the petrol and diesel. Freeing the auto fuels from the government control would mean a hike of Rs 6 per litre in both these fuels. One of the options which the eGoM could consider is that it could decontrol the price of petrol and diesel but implement it in phases.
The PSU oil marketing companies are estimated to be losing Rs 90,000-crore on account of selling fuels at less than market rates in 2010-11.
These firms had lost Rs 46,000 crore last fiscal. Currently PSU oil marketing companies are losing Rs 255 crore per day on the sale of fuels at subsidised rates. They are losing Rs 254.3 on each LPG cylinder and Rs 19.7 per litre of kerosene.
The Kirit Parikh committee report had recommended freeing of petrol and diesel prices and a hike of Rs 100 in LPG and Rs 6 per litre in kerosene.
The government had on Wednesday more than doubled the price of natural gas to $ 4.20 per mmBtu.
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