Consensus on oil prices eludes govt

The Left and the government could not arrive at a consensus on the issue of petroleum price increase today with the Communist parties reiterating their demand for a rollback of additional cess on petrol and diesel.

Communist Party of India (Marxist)'s Dipankar Mukherjee and Communist Party of India's D Raja had an hour-long meeting with Finance Minister P Chidambaram and Petroleum Minister Mani Shankar Aiyar.

The Left leaders demanded a rollback of excise duty increase announced in the Budget, shelving of the proposal to raise road cess and creation of a price stabilisation fund out of the cess collected on domestic crude oil.

Speaking to reporters after the meeting, Aiyar said, "We have listened very carefully to a very detailed presentation from the Left. The finance minister has agreed to carefully examine the points raised by them."

In a letter to the government, Mukherjee had said the duty changes made in the Budget helped the stand-alone private refineries, especially Reliance, while hitting the public sector oil companies.

"Import duty reduction has helped the refining sector but the excise changes, applicable after refining affects the marketing/retail sector managed by the oil PSUs," the letter said.

The biggest petroleum marketing company, Indian Oil Corporation, demanded Rs 4.84 a litre increase in petrol and Rs 4.52 in diesel.

Speaking to reporters today, Chairman and Managing Director S Behuria said they were hoping for some decision. He said the loss on kerosene was Rs 11.92 a litre and on LPG Rs 106 a cylinder.

Behuria said they were waiting for decision on sharing of under recoveries of oil marketing companies (OMCs)by refining and upstream companies.

At present, only the upstream companies, Oil and Natural Gas Corporation, Oil India and Gail India, were sharing the under recoveries incurred by OMCs.

Behuria said IOC alone recorded Rs 1,200 crore under recovery in petrol and diesel and Rs 1,400 crore in kerosene and LPG during April and May.

Public sector oil retailing firms have lost over Rs 5,800 crore in the first six weeks of the current fiscal due to non-revision of petrol, diesel, LPG and kerosene prices in line with the spurt in international oil prices and increase in duties.

State-run IOC, Bharat Petroleum Corporation and Hindustan Petroleum Corporation together lost Rs 2,560 crore on diesel and Rs 569 crore on petrol.

The Budget had lowered Customs duty on crude oil, LPG, kerosene, petrol and diesel but raised excise duty on petrol and diesel even as the same on LPG and kerosene was lowered.