With the Empowered Group of Ministers (EGoM) being not in place due to the departure of Pranab Mukherjee from the government, the Petroleum Ministry is contemplating sending a proposal for price hike in diesel, LPG and kerosene to the Cabinet Committee on Economic Affairs (CCEA) and leaving the decision to the Prime Minister, Manmohan Singh.
The EGoM, which is authorised to decide on diesel, LPG and kerosene pricing, has not met since June 25, 2011. “We can send a proposal for raising prices to the Cabinet Secretariat for listing before the CCEA, and it would be up to them to decide when it should be taken up,” according to a top official of the Petroleum and Natural Gas Ministry.
Pleading that the subsidy burden was going out of control and that there was an immediate need to re-visit prices of diesel, LPG and kerosene, the official said that this “unpopular move” had found consensus among all but little support due to number game in Parliament. “There is complete consensus that prices of diesel, LPG and even kerosene need to be raised. But when and how is uncertain,” the official said.
With the election of Vice-President scheduled for August 7, the top-brass in the government was reportedly of the feeling that prices could not be increased before that. “Soon after election (of Vice-President), there will be the monsoon session of Parliament. Then again, the government will not be able to raise prices as numbers are not on government’s side in Parliament,” the official said.
Prices of diesel, LPG and kerosene have not been raised since June 25 last year even though the cost of crude oil has spiralled and rupee has depreciated against the U.S. dollar, making imports costly. State-owned oil firms at present sell the fuel at a loss of Rs.11.26 a litre while they lose Rs.319 on sale of every 14.2-kg LPG cylinder for domestic consumption. Besides, they are losing Rs.28.56 per litre on sale of kerosene. “In case there is no price hike, the phenomenal losses of these three fuels to the tune of Rs.1,60,000 crore would have to be met by the government.”
