Petrol, diesel price hike imminent

Along with the earlier proposal to pass on the increase in the prices due to excise duty hike and clean fuels cost, which works out to Rs 2.50 per litre for petrol and Rs 1.30 per litre for diesel, a number of new equations are also being considered.

A moderate hike of Rs 1-1.50 per litre in petrol and diesel prices under a new scheme is being considered under which ONGC will be asked to bear part of the burden arising from increase in duties and spurt in global oil prices. Upstream firms like ONGC and OIL, who till last fiscal were partly subsidising LPG and kerosene, may be asked to dole out an additional Rs 2,000 crore on subsidising petrol and diesel.

Upstream firms have made huge killing because of rising crude prices and so they are being asked to bear some of the burden on retail front. The one-third subsidy sharing scheme for LPG and kerosene, where upstream firms ONGC, OIL and Gail bear one-third of losses on the two cooking fuel, is also likely to continue, sources said.

If the issue of price hike does not come up in the Cabinet today, then the issue may be deferred by a couple of weeks. However, the Left parties pressed for reducing the quantum of the hike, sources said.