Price hike or duty cut?
New Delhi, January 3
We have to find the best solution and we are considering duty cuts to deal with the solution, said oil minister Murli Deora.
The government is in touch with all parties on the issue and the Left is ready to cooperate with it to find a solution to the problem of surging oil prices, he said.
Petroleum secretary M.S. Srinivasan said: The prices of petrol and diesel are expected to go up by Rs 4 and Rs 2, respectively, and the announcement to this effect is likely to be made by the government in the first week of February.
A group of ministers, headed by external affairs minister Pranab Mukherjee, is likely to meet next week to take a final decision in this regard.
The government had last increased the fuel prices on June 6, 2006.
Deora had earlier met finance minister P. Chidambaram to discuss measures to cope with the record crude oil prices as the country imports over two-thirds of its oil.
The three government oil manufacturing companies Indian Oil, Bharat Petroleum and Hindustan Petroleum are projected to lose Rs 69.75 crore on the sale of petrol, diesel, LPG and public distribution system kerosene as the government has not allowed them to raise prices in line with the price of imported crude.
Petrol is being sold at a loss of Rs 8.74 per litre, diesel Rs 9.92 per litre, kerosene Rs 20.53 a litre and LPG at a loss of Rs 256.35 per cylinder.
The oil minister also advocated the need for protective conservation measures so that the country could look at a tangible target of reducing oil consumption. We have to see that we do not spend so much on oil, he added.
Indian Oil Corporation said it would sell bonds worth Rs 2,000 crore this month to meet the shortfall due to non-revision of fuel prices.