Fuel losses mount, price hike looms
New Delhi   02-Mar-2011

A day after the Budget glossed over the issue of high oil prices, the country's biggest oilmarketer IndianOil on Tuesday said its losses on petrol had risen to Rs 3 and on diesel to Rs 12.56 per litre. The company's director (finance) S V Narasimhan remained non-committal on whether the company would raise the price of petrol, which is not controlled by the government. I can't say anything on that (raising petrol price)... We will revise the price at an appropriate time, he said.

The creeping increase in international crude oil and other commodity prices is a reality that we are already confronting. The possibility of global commodity inflation adding to domestic inflationary pressures cannot be ruled out, FM Pranab Mukherjee said at a Ficci function on Tuesday.

Many saw an indication that there may be no other option for the government but to raise motor fuel prices, at least moderately, with a view to reducing the subsidy burden. Minister of state for finance Namo Narain Meena told the Rajya Sabha that cooking gas and kerosene would continue to be subsidised. IOC and other state-run oilmarketers had last raised petrol price by Rs 2.50 a litre in January. Even though crude has gone up to $110/ barrel since then, the oil marketers have not revised the price in anticipation of a reduction in duties in the Budget that would have done away with the need for a hike. Oil minister S Jaipal Reddy is expected to approach the ministerial panel on fuels for a direction on raising prices. If EGoM (empowered group of ministers) on diesel happens, that will happen with your knowledge. You will be informed, Reddy told reporters on Tuesday.