The Manmohan Singh ministry has decided to hike the prices of petrol and diesel next week despite resistance from Left parties."The government will soon come out with a small increase in the prices of petrol and diesel by next week, which everybody will have to bear with," Petroleum Minister Murli Deora said today.While oil marketing companies (OMCs) had sought a 25% hike in prices, sources close to the development said the government might allow a hike of only 5-8%.The government has not raised fuel prices since last September, which has hit PSUs like Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL). Reliance Industries (RIL), the oil marketing major in the private sector, has increased the prices of petrol and diesel recently by Rs 2 per litre."Profits of OMCs have fallen sharply last year because of a double whammy of lower refining margins and higher under-recoveries on liquified petroleum gas (LPG) and kerosene. Since a majority of the under-recoveries are on sales of LPG and kerosene, pressure on profit would continue to be high," an industry analyst said.
