The Hindu Business Line : No plans to raise petrol, diesel price, says Murli Deora

New Delhi, July 4While maintaining that there were no immediate plans to raise the retail selling prices of petrol and diesel, the Petroleum Minister, Mr Murli Deora, said that he would meet the Finance Minister, Mr P. Chidambaram, next week to seek bonds to partly compensate the State-owned oil companies for selling products below the cost price.

The Ministry is expected to seek Rs 19,000-crore worth of oil bonds for Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd, and Hindustan Petroleum Corporation Ltd in the current fiscal year ending March 2008. The total under-realisation for the fiscal is estimated to be Rs 55,000 crore. The Government expects state-run upstream companies to chip in an equal amount (Rs 19,000 crore) as part of sharing the burden of higher crude prices. The balance Rs 17,000 crore will be borne by the refining and marketing companies themselves.

“Just now there is no chance (of price increase),” Mr Deora told newspersons in response to reports that the Government is considering increasing the prices of the two petroleum products due to higher international crude oil prices.

Under-recovery

According to oil companies, the under-recovery on petrol and diesel stood at Rs 4.97 and Rs 4.45 per litre respectively. The under-realisation on sale of kerosene sold under the public distribution system stood at Rs 14.64 per litre and that on sale of domestic liquefied petroleum gas was Rs 189.14 per cylinder.

According to reports, the Ministry was considering a Rs 2 hike in petrol and a Re 1 increase in diesel prices as the Indian basket of crude oil crossed $69 a barrel mark. The Indian crude basket on July 2 stood at $69.62 a barrel. The current financial year (April till date) average stood at $66.57 per barrel, while the previous year (April 2006-March 2007) average stood at $62.46 a barrel. The June average stood at $68.19 a barrel.

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