Already neck deep in crisis because of the coal block allocations, the government is unlikely to hike diesel and cooking gas (Liquefied petroleum Gas) prices even after the end of the monsoon session of Parliament next week. A weary government is unlikely to take such a decision as it would further erode it’s credibility among the masses.
The government has been in fire-fighting mode since the time Comptroller and Auditor General (CAG) in a report stated that the exchequer lost about Rs 1.86 lakh crore due to free and faulty allocations of coal blocks the benefit of which went to private companies.
It may be mentioned that the price of diesel, LPG and kerosene distributed through public distribution system have not been revised since June last year. A price revision of these commodities was expected after the end of the ongoing monsoon session of Parliament which is coming to an end on September 7.
Oil firms are losing Rs 450 crore per day by selling diesel at prices that are Rs 15.55 a litre lower than its cost, kerosene at a discount of Rs 29.97 a litre and under selling of Rs 231 per 14.2-kg LPG cylinder.
According to sources in the government, “It is extremely difficult under present circumstances to raise fuel prices,” a top government official said here. “I am not saying that it is impossible but it certainly does not look feasible at this moment of time,” he added.
“Even a hike in prices of petrol, a fuel which was freed from government control in June 2010 would be difficult,” he said.
Oil PSUs are losing Rs 3.85 per litre on sale of petrol as global oil prices have firmed up since the last revision in July. Petrol price were last hiked by `0.70 a litre on July 24. It currently costs Rs 68.46 per litre in Delhi and oil firms were hoping to be able to raise rates once Parliament session ends next week.