The Hindu Business Line : Fuel price issue moves to political plane

New Delhi, May 30 Even while debating ways to grapple with the inflation blues, the political leadership of the UPA Government has another task on hand – of formalising a compensation package for the public sector oil marketing companies (OMCs) that are suffering heavy revenue losses.

The proposed package that includes a hike in prices of auto fuels and cooking gas is now dependent on a political decision.

While various numbers are floating around, indications are that the Government could consider increasing price of diesel by Rs 3/litre, petrol by Rs 5/litre and LPG by Rs 50/cylinder. Another speculation is that petrol price may see an increase by Rs 3/litre, diesel by Rs 2/litre and LPG by Rs 20/cylinder. Besides this, an increase in the subsidy burden to be shared by the upstream oil companies, issuance of oil bonds and possible duty rationalisation could be in offing.

A final call of the issue would be taken by the Cabinet which may meet on Saturday. While the corridors of power were abuzz with the news that a Cabinet meeting could be expected Saturday morning, there is a possibility that it could be only after the Congress Working Committee (CWC) meeting.

The week saw hectic consultations between the core Group of Ministers that included the Ministers of Finance and Petroleum on working out a bail out package for the OMCs.

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