Govt defers decision on fuel price hike

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By Agencies | Jun 07, 2010, 06.08 PM IST

NEW DELHI: Government has postponed a controversial decision on raising fuel prices, a government official said on Monday after strong criticism from some coalition partners against the potentially inflationary move. (Watch)

A panel of ministers led by Finance Minister Pranab Mukherjee would soon meet again to take a final decision, Petroleum Secretary S. Sundareshan told reporters after the meeting.

Petrol in Delhi currently costs Rs 47.93 a litre, while diesel is priced at Rs 38.10 a litre.

Decontrol of auto fuel prices has become easier for the government after international crude oil prices fell over $ 10 to quote at $ 72-74 a barrel.

State-owned Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum currently lose Rs 203 crore per day on selling fuel below imported cost.

They currently sell petrol at a loss of Rs 3.35 a litre, while that for diesel is Rs 3.49, Rs 18.82 for PDS kerosene and Rs 261.90 for every 14.2-kg LPG cylinder.

With crude down at $70 a barrel - and seen rangebound in $70-80 levels - the loss for 2010-11 is estimated at Rs 72,300 crore. Mukherjee has stopped issuing bonds - Centre’s IoUs that do not reflect in its budget books - to windowdress oil firms’ bottomlines.

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