Deora, FM to discuss fuel price hike on Feb 14

Facing opposition from key allies in the UPA government, Petroleum Minister Murli Deora will meet Finance Minister Pranab Mukherjee on Februrary 14 to explore the possibility of tweaking a proposal to hike fuel prices.

The Petroleum Ministry did not take to the Union Cabinet, which met today, the proposal to free petrol prices from government control, along with a hike in diesel, cooking gas and kerosene rates, apparently because of opposition from the Trinamool Congress and the DMK to such a move.

"No, it was not discussed... Today," Home Minister P Chidambaram said after a meeting of the Union Cabinet.

Sources said both Mukherjee and Deora were in favour of Rs two to three a litre hike in petrol and diesel prices and Rs 25 per cylinder increase in LPG rates, but the allies did not want diesel, LPG and kerosene prices to be touched.

Without a hike in fuel prices, state-run oil firms would incur a whopping Rs 46,030 crore revenue loss this fiscal. Of this, only Rs 20,000 crore is coming as subsidy support and the uncovered amount is enough to erode the networth of retailers.

To find a solution, Deora will meet Mukherjee on February 14, the sources said, adding that the meeting will explore if government subsidy support can be increased so as to keep the price increase to the bare minimum.

Deora, on his part, met the Prime Minister after the Cabinet meeting and submitted a memorandum asking the government to cover the unmet revenue loss on fuel sales.