Ministry seeks Rs 10/litre hike in petrol

[N.Sukumar]

New Delhi: Petroleum Ministry is seeking a Rs 10 per litre increase in
petrol and Rs 5 a litre hike in diesel prices along with cut in
customs and excise duties to offset the impact of surge in crude oil
prices that have touched $135 per barrel.

"The situation is getting to be alarming. We need to stem the rot in
the beginning," Petroleum Secretary M S Srinivasan told reporters
after a stock-taking meeting with the heads of oil PSUs.

Srinivasan, however, said the cabinet scheduled for today will not
consider raising fuel prices as the subject needed some more
preparation and a note would be moved to the authorities in a day or
two.

"We expect a decision in 3-4 days time, he said, adding the Ministry
was suggesting a combination of price hike and duty cut to lower the
projected Rs 2,00,000 crore under-realisation on sale of petrol,
diesel, LPG and kerosene.

"The price hike is inevitable," he said but refused to say what
quantum of hike the ministry was seeking.

Srinivasan said the Ministry was seeking a lowering of customs duty on
crude from 5 per cent to zero and import duty on petrol and diesel
from 7.5 per cent to 2.5 per cent. Besides, the Ministry was also
seeking cut on excise duty on the two products.

Petroleum Minister Murli Deora said he had discussed the situation
with the Prime Minister Manmohan Singh last evening and will raise the
issue again today to seek and early meeting of the Cabinet.

"We are trying to see that some action is taken immediately," Deora
said.

N.Sukumar
Research Analyst