Polls over, action on petrol prices likely

With completion of assembly elections scheduled this year in four states and a Union Territory, the Union government will now focus on dealing with pending issues in the petroleum and financial sectors.

Accordingly, the petroleum and natural gas ministry will consider a proposal to increase prices of diesel by Rs 3-4 a litre; government companies are likely to also raise petrol by Rs 3 a litre. An empowered group of ministers on fuel pricing headed by Finance Minister Pranab Mukherjee is scheduled to meet next week to review prices. Similarly, the finance ministry will expedite action on implementing financial sector reforms.

The price of diesel has not been raised for nearly 11 months, though losses of oil companies on this count have touched a record high. Petrol prices were decontrolled last year, but haven’t been raised since January. Currently, the government’s oil marketing companies — Indian Oil, Bharat Petroleum and Hindustan Petroleum — lose Rs 18.19 on every litre of diesel, Rs 29.69 on every litre of kerosene and Rs 330 for every LPG cylinder. At these rates, they could end the year with an all-time high loss of Rs 180,000 crore. They also lose Rs 8.50 per litre of petrol sold.

A group of ministers will also meet on the $9.6-billion Cairn-Vedanta deal towards the end of this month.

The government has already introduced major bills like the Constitutional amendment to roll out a goods and services tax, a pension reforms bill and a banking laws amendment bill. Its focus would be to get these passed.