The hike in petrol and diesel prices is not happening until the monsoon session of Parliament gets over next month. But once it gets over on September 14, the UPA government plans to raise petrol and diesel prices by Rs 4 and Rs 2 per litre respectively.The decision to keep the price hike in abeyance was taken at a meeting between Prime Minister Manmohan Singh and Petroleum Minister Murli Deora on Monday where it was agreed to kickstart the process of raising auto fuel prices, but not to the required extent. The package, as suggested by Deora, was a halfway price increase accompanied by the usual three-way sharing of the balance under-recoveries between oil marketing companies, the government and the producers of crude oil and natural gas. In essence, said officials, the decision — when it comes — would be similar to last year’s as the Indian basket of crude oil was hovering around the same levels of $65 a barrel.In June 2006, the UPA government raised the price of diesel and petrol by Rs 2 and Rs 4 a litre, but rolled it back in two instalments, first in November 2006 and February 2007. The three Oil Marketing Companies — Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum — are losing Rs 5.88 a litre on sale of petrol and Rs 4.80 a litre on diesel. They also lose Rs 14.63 on a litre of kerosene and Rs 190 on a 14.4-kg cylinder of domestic LPG. With price increase fixed below the required, officials of Finance and Petroleum ministries would meet over the next few weeks to work out the quantum of oil bonds that the government could afford to issue as its share of the subsidy burden. These bonds, sources said, would only be included in the second supplementary for Demand of Grants during winter session.
