No EGoM meet on fuel price hike tomorrow

Belying expectations, a meeting of a panel of ministers headed by Finance Minister Pranab Mukherjee to decide on raising diesel, domestic LPG and kerosene rates has not yet been scheduled.

The Empowered Group of Ministers (EGoM) on fuel prices were previously said to meet on June 9 but no such meeting has been scheduled for tomorrow, an official said here today.

"A top official of the oil ministry had on May 26 briefed reporters about the impending EGoM meeting taking place on June 9. But the official perhaps may have mixed up issues as a separate EGoM on natural gas allocation was the one that was scheduled for June 9," he said.

While no EGoM on fuel price was scheduled for June 9, even the ministerial panel on deciding users of natural gas produced from fields like Reliance Industries' eastern offshore KG-D6 was cancelled.

Oil Minister S Jaipal Reddy is pushing for a hike in diesel, domestic LPG and kerosene rates to cover for rise in crude oil cost. A decision on the issue can be taken only by the EGoM which has representation from all key allies of the ruling United Progressive Alliance (UPA).

The official said Mamata Banerjee was part of the EGoM but she has since relinquished her Railway portfolio in the Central government for Chief Ministership of West Bengal. Her replacement on the EGoM is yet to be announced.

State-owned oil firms had last month hiked petrol price by a steep Rs 5 per litre and oil ministry was pushing for a Rs 4 per litre increase in diesel and at least Rs 20-25 per 14.2-kg cylinder hike in domestic cooking gas (LPG) rates.

Kerosene price hike too was on the cards.

EGoM on fuel price was originally scheduled to meet on May 11, a day after poll in West Bengal ended but the panel meeting was postponed.

"Public sector oil companies are losing close to Rs 465 crore per day on selling diesel, domestic LPG and kerosene at government controlled rates. We cannot continue with this for long," an oil ministry official said.

Oil companies are losing Rs 14.22 on sale of every litre of diesel at current price of Rs 37.75 per litre in Delhi.

Besides, state oil firms lose Rs 27.47 a litre on kerosene and Rs 381.14 per 14.2-kg domestic LPG cylinder.

The rates of the three products were last hiked in June, 2010 when crude was ruling at $72 per barrel. The basket of crude oil India buys averaged $110 a barrel this month.

The government had on June 25 hiked prices of diesel by Rs 2 a litre, LPG by Rs 35 a cylinder and the poor man's cooking fuel kerosene by Rs 3 a litre. This hike was only a fraction of the desired increase to bring domestic price on par with international rates.