Chennai, May 24 (IANS) The empowered group of ministers scheduled to meet June 7 will decide on a hike in petrol and diesel prices, Petroleum Minister Murli Deora said Monday.
‘The petroleum and natural gas ministry is working out a formula addressing the under-recovery of losses faced by government-owned oil marketing companies,’ Deora told reporters here.
Deora was here to attend the parliamentary consultative committee of his ministry.
He said the government will take a balanced view taking into account the interests of consumers and vulnerable sections of the society as well as the health of the oil companies.
Ministry officials, however, hinted at a hike in petrol and diesel prices as the price of crude oil in the international markets is now hardening.
‘The international price of crude oil is around $85 per barrel now. At this price, the oil companies will face an under-recovery of over Rs.100,000 crore,’ said Petroleum Secretary S. Sundareshan.
Also, the debt-equity ratios of oil marketing companies is turning adverse owing to their borrowing, which stands at Rs.88,300 crore at the end of last fiscal.
Deora cited the increasing crude prices since 2003-04 when it ranged at $28 per barrel to $142 per barrel in 2008.
He said the government decided not to pass on the full price hike to the people to protect them from inflationary pressures.
The oil marketing companies have under-recoveries of Rs.46,051 crore in the last fiscal and the government has provided them with an assistance of Rs.26,000 crore, while the upstream oil companies have contributed around Rs.14,430 crore.
Sundareshan said the balance was absorbed by the oil marketing companies.