EGoM may meet on 21 May to decide on fuel pricing

EGoM may meet on 21 May to decide on fuel pricing

New Delhi: An Empowered Group of Ministers headed by finance minister Pranab Mukherjee is likely to meet on 21 May to decide on freeing petrol and diesel prices from government control.

The ministerial panel will also decide on ways to deal with the revenue lost on selling domestic LPG and PDS kerosene below cost, an official in know of the development said.

“The EGoM meeting has been tentatively scheduled for 21 May. There are availability issues about one or two ministers on that day and if they are unable to make it on that day, the meeting may be postponed," he said.

Besides Mukherjee, the EGoM also includes oil minister Murli Deora, agriculture minister Sharad Pawar, chemical and fertiliser minister M K Alagiri, railway minister Mamata Banerjee, road transport minister Kamal Nath and Planning Commission deputy chairman Montek Singh Ahluwalia.

According to the terms of reference (ToR), the EGoM is to consider a pricing policy for petrol and diesel, including decontrol, he said, adding that it also has to decide on ways to bridge the deficit between imported cost and retail price of LPG and kerosene through a marginal price hike.

For petrol and diesel prices to be freed from government control, rates would have to be raised by over Rs6 a litre.

Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum currently lose Rs272.5 crore a day by selling fuel below cost. They may end the fiscal with a Rs90,150-crore revenue loss.

They currently sell petrol at a loss of Rs6.63 a litre while the loss is Rs6.25 per litre on diesel, Rs19.74 per litre on PDS kerosene and Rs254.37 per 14.2-kg LPG cylinder.

Industry sources said the EGoM may decide to free just the petrol price for now and approve a marginal increase in diesel and LPG rates, they said.

The official said the three firms had lost Rs46,051 crore on selling petrol, diesel, domestic LPG and PDS kerosene below imported cost in 2009-10. Of this, Rs14,430 crore was the loss on petrol and diesel, which is entirely being met by upstream firms like ONGC and OIL.

To partly cover the Rs31,621-crore loss on LPG and kerosene, the finance ministry has agreed to give Rs26,000 crore. The issue of the remaining Rs5,621 crore would also have to be decided by the EGoM, he said.