New Delhi: Petrol and diesel prices are likely to be hiked by Rs2 a litre and Re1 a litre respectively after the current monsoon session of Parliament ends next week.
The Petroleum Ministry has moved a Cabinet note seeking hike in prices of petrol, diesel, PDS kerosene and domestic cooking gas LPG in line with the rise in global crude prices. But it has not specified the quantum of hike, leaving it for the Cabinet to decide, officials said.
Currently, petrol is being sold at a loss of Rs2.79 a litre while diesel is priced Rs 4.65 below the cost. Oil companies suffer a loss of Rs15.50 on sale of every litre of kerosene and Rs178.15 on sale of every LPG cylinder.
Officials said given the political sensitivity of mass- consumed cooking fuels LPG and kerosene, the hike may be restricted only to petrol and diesel.
State-run Indian Oil, Bharat Petroleum and Hindustan Petroleum will together lose Rs52,452 crore in revenues this fiscal year if fuel prices are not raised. The Petroleum Ministry has projected a revenue loss of Rs16,120 crore on kerosene, Rs11,088 crore on domestic LPG, Rs6,682 crore on petrol and Rs18,562 crore on diesel in 2007-08.
A Re1 per litre hike in petrol price would give Rs607 crore additional revenue during the remaining seven months of the fiscal. A similar hike in diesel would give Rs2,479 crore and Rs659 crore on kerosene. A Rs10 per cylinder hike in LPG prices would generate Rs403 crore.
Officials said the Ministry has suggested that government bear half of the remaining under-realization after the hike through subsidy and oil bonds, while the balance would be met from upstream firms like ONGC.