You are here: Home » Economy & Policy » News
Business Standard

Govt trying not to raise petroleum prices: Deora

BS Reporter  |  New Delhi 

Petroleum Minister Murli Deora today said the government was trying its best not to increase the prices of petroleum products. Deora will meet Finance Minister Pranab Mukherjee tomorrow to seek higher subsidy for oil marketing companies (OMCs). He also said any decision on petroleum pricing would be taken up only after the Kirit Parikh committee submitted its report later this week.

The petroleum ministry is expected to seek about Rs 19,000 crore more subsidy to compensate oil marketing companies fully for loss on sale of LPG and kerosene. Out of an estimated Rs 43,000-crore underrecoveries that the three government companies — Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum — will incur during 2009-10, Rs 31,000 crore is on account of LPG and kerosene.

The government has already committed to a Rs 12,000-crore cash subsidy this year. “Whatever the government has promised for subsidy, it has to give, bonds or no bonds,” Deora said, adding that the finance minister was not keen on oil bonds. “We must find some solution to this,” he added.

He said the government was trying not to increase the auto fuel prices. “The government is very worried about the price rise. If hypothetically, there was an increase in diesel of Rs 2, then it will have a cascading effect on commodities,” the minister said.

New Petroleum Secretary S Sundareshan said that one of his priorities would be to ensure “that OMCs do not suffer from underrecoveries”.

Upstream companies Oil and Natural Gas Corporation, Oil India and GAIL India have pitched in with Rs 8,000 crore so far in the form of discounts to the three companies. While Sundareshan said the ministry would continue to negotiate with the finance ministry for getting higher subsidy, Deora indicated that the option of asking upstream companies to shell out more by making up for less government subsidy was there as these companies “were ready to cooperate”.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, February 02 2010. 00:49 IST