New Delhi: Petrol and diesel prices will not be hiked this year as the government decided on a package including issue of oil bonds to offset the impact of surging international crude oil prices on 11 October.
“We have kept our promise of not raising prices of sensitive petroleum products,” petroleum minister Murli Deora said after a meeting of the Cabinet.
Of the Rs54,935 crore revenue loss that public sector oil firms are likely to suffer this fiscal for not raising prices of petrol, diesel, domestic LPG and PDS kerosene in line with cost, 42.7% or Rs23,457.24 crore would be borne by the government.
Besides oil bonds, the Cabinet also decided to extend budgetary subsidy on domestic LPG and PDS kerosene for three more years from April 1, 2007, Deora said, adding that the government provides about Rs 2,680 crore from the budget to subsidise the mass-consumed cooking fuels.
Indian Oil, Bharat Petroleum and Hindustan Petroleum will get oil bonds worth Rs 23,457.24 crore. The first tranche of about Rs11,800 crore to compensate for losses suffered in first half of 2007-08 would be issued by next week.
“Oil bonds as percentage of under-recovery is same as last year. In 2006-07, oil bonds worth Rs24,121 crore were issued,” he said.
Petroleum Secretary M S Srinivasan said 35% or Rs19,227.25 crore of the total under-realisation in revenue would be borne by upstream firms ONGC, GAIL and OIL. Last year, the upstream firms contributed Rs20,507 crore. The remaining amount of under-recovery would be borne by IOC, BPCL and HPCL.