GoM meet to decide on diesel, LPG prices next week

A day after oil firms hiked petrol rates by a steep Rs 5 per litre, Finance Minister Pranab Mukherjee today said a ministerial panel will decide on raising diesel, LPG and kerosene prices next week.

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

"A decision will be taken on raising prices of these items when the EGoM meets next week," Mukherjee told reporters here after meeting Congress MLAs elected in the West Bengal Assembly elections.

He, however, neither gave the date of the EGoM meeting nor the quantum of hike the panel may consider.

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

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

Besides, state oil firms lose Rs 29.69 a litre on kerosene and Rs 329.73 per 14.2-kg domestic LPG cylinder.

On the biggest ever hike in petrol prices, Mukherjee said the decision was taken by the oil companies as the government had deregulated petrol pricing in June last year.

Though Indian Oil, Bharat Petroleum and Hindustan Petroleum had been given freedom to decide on retail selling price of petrol, they informally consulted oil ministry on every revision.

The three had not revised rates since January as five crucial states including West Bengal, Tamil Nadu and Kerala went to polls.

A day after state assembly results, the firms hiked petrol price by Rs 5 per litre which was less than half of Rs 10.50 a litre increase need to cover for cost of crude oil which had touched a two-and-half year high of $110 per barrel.

"Decision on petrol prices is taken by oil marketing companies," Mukherjee said. "For other petroleum products like diesel, LPG and kerosene there is the EGoM."

The Finance Minister said crude oil was ruling at $68 per barrel when diesel, LPG and kerosene rates were last revised in June 2010. Crude is now above $110 a barrel.