EGoM meet on fuel price inconclusive

The much-awaited first meeting of the empowered group of ministers (EGoM) on fuel pricing ended here today but no resolution was reached. Finance Minister Pranab Mukherjee-headed group met here to deliberate on the recommendations of the Kirit Parikh report that suggested market-linked prices for petrol and diesel.

“The EGoM came to the conclusion that further discussions would be necessary before views are firmed up. A meeting will be scheduled shortly,” said an official statement. The possible inflationary impact of the rise in prices of petroleum products was also discussed.

The petroleum ministry made a presentation to the EGoM on the recommendations of the report. The report had also suggested a phased hike in kerosene and LPG prices based on the increase in per-capita urban and rural incomes. It had also proposed a reduction in kerosene sold through ration cards by 20 per cent. The OMCs at present incur an underrecovery of Rs 17.50 a litre on kerosene and Rs 262 on every LPG cylinder. Petroleum secretary S Sundareshan said more discussions on the issue would be needed to arrive at a conclusion.

The EGoM noted that between 2003-04 and 2009-10, the government faced a burden of Rs 3,45,000 crore in compensating the losses of oil companies.

Besides Mukherjee, the EGoM includes Petroleum Minister Murli Deora, Agriculture Minister Sharad Pawar, Chemical and Fertiliser Minister M K Alagiri, Railway Minister Mamata Banerjee, Road Transport Minister Kamal Nath and Planning Commission Deputy Chairman Montek Singh Ahluwalia. Pawar, Banerjee and Nath, however, did not attend today’s meeting.