CCPA to meet today on diesel, cooking gas price hike
“Radical decision need to be taken to check the burgeoning subsidy bill but again UPA and radical decisions don’t go along easily,” an oil ministry source said here.
The Oil Ministry, he said, had circulated a note to the members of the CCPA, which is headed by the Prime Minister Manmohan Singh, detailing the crisis created by rise in crude oil prices and fall in value of rupee against the US dollar.
“We haven’t made any suggestion on quantum of increase,” he said. “There will be a discussion certainly but a decision is not certain.”
PSU oil firms losing a record Rs 560 crore per day on sale of regulated diesel and cooking fuels and another Rs 16 crore (rpt) crore a day on petrol. If rates are not increased, state-owned oil firms will be saddled with an unprecedented Rs 200,000 crore revenue loss this fiscal.
Fuel retailers are losing a little less than Rs 5 per litre on sale of petrol, a commodity which was freed from government control in June 2010 but whose rates haven’t moved in tandem with the cost.
They sell diesel at a loss of Rs 19.26 a litre, kerosene at Rs 34.34 per litre and domestic LPG at Rs 347 per 14.2-kg cylinder.
While diesel prices have not been revised since June last year, petrol rates were last hiked in July. A decision on raising petrol price will be taken after the CCPA decision on diesel, domestic LPG and kerosene.
The source said the CCPA has been informed about how the three state-owned fuel retailers are borrowing to make up for the deficit. Their borrowings shot up to Rs 1,57,617 crore at end of June, from Rs 1,28,272 crore as on March 31.