A hike in petrol and diesel prices looks imminent by the weekend after Prime Minister Manmohan Singh on Thursday finalised details of a package to bail out state-run oil firms reeling under high international oil prices.
Singh discussed with External Affairs Minister Pranab Mukherjee, Finance Minister P Chidambaram, Petroleum Minister Murli Deora and Planning Commission Deputy Chairman Montek Singh Ahluwalia the scenario emerging from doubling of crude prices since the last price hike in February.
"We discussed the various options and hopefully, by tomorrow or by day after Friday, we will have a solution," Deora told reporters after the 75-minute long meeting.
Though Deora refused to say what the expected decision would be, official sources said a hike in petrol and diesel prices along with a minor duty rejig and oil bonds for fuel retailers would form part of the package that would be placed before the Cabinet for approval.
The package, they said, would be a climb down from the Rs 10 a litre hike in petrol, Rs 5 per litre in diesel and Rs 50 per cylinder increase in LPG prices demanded by the Petroleum Ministry, along with cut in customs duty on crude oil and slashing excise duty on fuel.
"International prices touching $135 a barrel has forced down our throat Rs 225,000 crore revenue loss (on sale of petrol, diesel, LPG and kerosene). Unless we act, companies will not be left with cash to import crude," Deora said.
"The Prime Minister and Finance Minister saw papers (of projected revenue loss and options thereof). They realise very much that we need to help (PSU oil firms) on a war-footing," Deora said.
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