Vehicle owners can heave a sigh of relief, though only temporarily, as the Centre has asked oil marketing companies (OMCs) to not increase petrol prices till the Uttar Pradesh elections are over.
Senior officials in the petroleum ministry on Friday told DNA, “We can’t hike petroleum prices till budget session. There would be uproar all over the country. Our own allies have opposed price hike in the past.”
Currently, non branded petrol is sold at Rs 65.64 per little in Delhi, Rs70.66 in Mumbai, Rs69.55 in Chennai and 70.03 in Kolkata.
The OMCs, which review prices on the 15th and last day of each month, wanted to raise petrol price by about Rs 2 per litre on December 31. The depreciation in the value of rupee in December had resulted in a revenue loss of Rs 2 per litre on petrol. However, the government did not allow the companies to increase the prices.
The companies had reduced petrol prices by Rs 2.22 per litre, or 3.2%, on November 16, followed by 0.78 paise per litre reduction on December 1. After that, the petroleum ministry did not allow the OMCs to hike petrol prices on two consecutive occasions.
However, the petroleum ministry has asked the ministry of finance to chart out a way to compensate the oil companies for selling the fuel at subsidized rates.
“We are happy that the finance ministry has promised to allocate Rs 30,000 crore, but our real needs would be much more by the end of the year. We will meet the finance minister on the issue before the budget,” the official said.
The finance ministry has already promised allocation of Rs 30,000 crore assistance to oil PSUs for the first two quarter of 2011-12. According to petroleum ministry’s estimates, the under-recoveries (revenue loss) of oil marketing companies in the current fiscal is likely to be around Rs 1,30,000 crore. However this estimate was at the prices of November 2011. There has been a steep rise in the prices of gasoline and the rupee has also been depreciating constantly. The ministry has not released its latest estimates of the full year revenue loss.
