No fuel hike now, will ask more money for oil firms: Deora (Lead)

February 1st, 2010 - 6:16 pm ICT by IANS  

Pranab Mukherjee New Delhi, Feb 1 (IANS) Petroleum Minister Murli Deora Monday said he will meet Finance Minister Pranab Mukherjee to ask for more compensation for the state oil marketing companies suffering losses due to fuel subsidy, and added there was no provision for hike in fuel prices in the short term due to inflation.
“We are trying not to increase the auto fuel prices,” Deora told reporters here. He said any decision would be taken only after the Kirit Parikh committee on the pricing policy submits its report. The committee is likely to submit its report this week.

“You know 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.

But Deora said his meeting with Mukherjee on Tuesday would be to deal with the shortfall that the oil marketing companies are facing due to the subsidized retail prices of petrol, diesel, kerosene and cooking gas.

The estimated under-recoveries in the last three quarters is Rs.29,000 crore, out of which upstream companies - ONGC and Oil India Ltd - have contributed Rs.8,000 crore towards losses from petrol and diesel. The government has so far promised only Rs.12,000 crore as cash for under-recoveries from kerosene and LPG, but this leaves a shortfall of Rs.9,000 crore for the period April to December 2009.

The total estimated under-recoveries for this fiscal is Rs.43,000 crore, at a global oil price of $73 per barrel.

“Whatever the government has promised for subsidy, they have 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.”

The new Petroleum Secretary S. Sundareshan said that one of his priorities would be to ensure “that OMCs (oil marketing companies) do not suffer from under-recoveries”. He said in the last two years, 2007-08 and 2008-09, after the upstream companies had made their contribution, the government had paid for the entire loss.

“We have no disagreement with the finance ministry. We are working constructively to find a solution,” he said.

Related Stories

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |