In a clear signal that it is not going to bite the bullet of hiki ng prices of diesel, cooking gas and kerosene, the UPA government on Tuesday made it clear that it is not going to deregulate prices of these fuels.
“At present there is no such proposal,” Minister of State for Petroleum and Natural Gas R P N Singh informed the Rajya Sabha on Tuesday. Singh’s comments are not totally in sync with what the Finance Ministry has been articulating on raising prices of non-petroleum products.
In April, the Finance Ministry had said that the government has in-principle agreed to make the prices of diesel market determined except that of kerosene and cooking gas.
With crucial Assembly elections in Himachal Pradesh and Gujarat slated for later part of this year, the government does not want to any chances. Singh said the government is providing subsidy of Rs 0.82 per litre on public distribution system kerosene and Rs 22.58 on every cooking gas cylinder.
Besides these, the public sector oil marketing companies (OMCs) also incur under recoveries or revenue loss on sale of diesel, PDS kerosene and domestic LPG as the prices of these products are being modulated by the government. The three OMCs-Indian Oil Corporation, Hindustan Petroleum Corporation and BPCL incurred under recoveries of Rs 1,38, 541 crore on selling diesel, LPG and kerosene. To make up for the losses, the government has provided Rs 83,500 crore in cash assistance beyond the subsidy from the budget to the OMCs while upstream firms like Oil and Natural Gas Corporation have given in Rs 55,000 crore. Indian Oil Corporation, HPCL and BPCL currently lose about a total of Rs 450 crore per day on sale of diesel, domestic cooking gas and kerosene.
They are losing Rs 15.55 a litre on diesel Rs 29.97 a litre on kerosene and `231 on every 14.2-kg cylinder.