EGoM headed by Finance Min Pranab Mukherjee has cleared decontroling the prices of Petrol which makes it dearer by upto Rs 3.5 /litre while Diesel will be costlier by Rs 2/litre and LPG cylinder to cost Rs 35 more whereas kerosene will be dearer by Rs 3/litre from Friday. In a major decision to bring petroleum products in line with market rates, the government on Friday freed petrol from all pricing controls and hiked diesel prices by Rs. 2 a litre, Oil Secretary S. Sundareshan announced after the meeting of the Empowered Group of Ministers (EGoM) in New Delhi on Friday. Even diesel prices will be eventually freed of all administrative controls, Sundareshan said. The decisions, taken by the EGoM headed by Finance Minister Pranab Mukherejee, were timed appropriately to take advantage of relatively lower global crude prices, which are hovering around $77 a barrel.
Besides, this would also help cut down on the government’s huge subsidy bills, as also relieve the oil marketing PSUs of staggering burden on account of selling these fuels much below the market prices. Sundareshan said that the government would, however, continue to “heavily subsidise” the cooking fuels. Oil Minister Murli Deora had, on more than one occasion, briefed the Prime Minister Manmohan Singh and Mukherjee on the crisis that would befall oil PSUs if no decision was taken on hiking prices. In May, WPI-based inflation provisionally entered double digits at 10.16 percent. State oil firms currently lose about Rs. 215 crore per day on selling fuel below the imported cost. At present, petrol is being sold at Rs. 3.73 a litre below its cost, diesel at a loss of Rs. 3.80 per litre, kerosene at Rs. 18.82 a litre and domestic LPG at a discount of Rs. 261.90 on every 14.2-kg cylinder.
Besides, this would also help cut down on the government’s huge subsidy bills, as also relieve the oil marketing PSUs of staggering burden on account of selling these fuels much below the market prices. Sundareshan said that the government would, however, continue to “heavily subsidise” the cooking fuels. Oil Minister Murli Deora had, on more than one occasion, briefed the Prime Minister Manmohan Singh and Mukherjee on the crisis that would befall oil PSUs if no decision was taken on hiking prices. In May, WPI-based inflation provisionally entered double digits at 10.16 percent. State oil firms currently lose about Rs. 215 crore per day on selling fuel below the imported cost. At present, petrol is being sold at Rs. 3.73 a litre below its cost, diesel at a loss of Rs. 3.80 per litre, kerosene at Rs. 18.82 a litre and domestic LPG at a discount of Rs. 261.90 on every 14.2-kg cylinder.
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