New Delhi: A hike in petrol and diesel prices looks “inevitable” even though the increase may not be of the order of Rs 10 and Rs5 a litre respectively sought by the Petroleum Ministry.
“It (price rise) is inevitable,” Petroleum Secretary M S Srinivasan said referring to Rs2,00,000 crore under realisation expected by public sector oil companies this year on sale on petrol, diesel, LPG and kerosene because of the surge in global crude prices.
PSU oil companies like Indian Oil, Bharat Petroleum and Hindustan Petroleum are facing a huge liquidity crunch because of the government bar on raising prices and may soon run out of funds to import crude oil.
“The situation is alarming and we want to stem the rot at the beginning,” he said, adding that the minister was pushing for a combination of auto-fuel price hike and a cut in customs and excise duties.
Petroleum Minister Murli Deora apprised the Prime Minister of the situation arising from crude touching $135 per barrel and said, “A decision needs to be taken immediately.”
“The Prime Minister is concerned about the financial health of the PSUs and he has asked his principal secretary to meet secretaries of finance and petroleum along with the heads of the three oil companies to reconcile differences on the issue,” he said.
Asked if a decision was likely today or tomorrow, Deora said it will take sometime, “may be 3-4 days.”
Srinivasan said the Ministry was seeking lowering of customs duty on crude from 5% to 0% and import duty on petrol and diesel from 7.5% to 2.5%. Besides, the Ministry was also seeking cut on excise duty on the two products.