EGoM unlikely before next month

Battling backlash from within and outside to the steep Rs 7.54 a litre hike in petrol prices, the government doesn't want to open a new front with its allies like TMC by calling a meeting of the Empowered Group of Ministers (EGoM) soon, a top government official said.

"In my perception, the EGoM will not meet soon... certainly not this month," he said.

The government perhaps is buying time to let flared tempers cool before calling the meeting of the EGoM where the Congress party's ruling allies TMC and DMK are also represented.

The EGoM has not met in almost a year even though depreciation in the rupee and rise in international oil prices raised cost of imports.

"The logic in favour of increase in price of diesel is unassailable but politics and logic don't go together," Oil Minister S Jaipal Reddy told reporters here. "What is desirable is known. Politics is the art of making desirable (politically) acceptable."

Unlike petrol, the prices of diesel, LPG and kerosene, which are regulated commodities, cannot be revised by the petroleum ministry or the oil companies themselves. "EGoM alone is empowered to do so," he said.

"I have been urging that a meeting be convened. I don't know when it will be convened," he said.

State-owned oil companies currently lose Rs 512 crore per day on selling diesel, domestic LPG and kerosene. Diesel is currently sold at a loss of Rs 15.35 a litre, kerosene at Rs 32.98 per litre loss and oil firms lose Rs 479 on sale of every 14.2-kg domestic LPG cylinder.

IOC, HPCL and BPCL had together lost Rs 138,541 crore in revenue in 2011-12. This year they are projected to lose a record Rs 193,880 crore.

This week's hike was the steepest hike in petrol price ever and the first increase in more than six months. Previous high was Rs 5 a litre done twice - May 5, 2011 and May 24, 2008.

State-owned oil firms, which had in the fiscal ending March 31, 2012 lost Rs 4,890 crore on petrol sales, were currently losing Rs 6.28 per litre on petrol. After including 20 per cent VAT, the desired increase in petrol price in Delhi came to Rs 7.54 a litre.