Jan. 5: The oil minister, Mr Murli Deora, on Wednesday said his ministry is not in favour of raising diesel and domestic LPG prices in response to the spurt in global crude oil prices. This move will add to the already high inflation rate.
Last week, a meeting of the Empowered Group of Ministers (EGoM), which was headed by Mr Pranab Mukherjee, the hike in diesel prices was postponed indefinitely on Mr Deora’s insistence. “I don’t think the EGoM should meet just now to decide on raising prices,” Mr Deora said on Wednesday.
Others in the government have favoured raising the fuel prices as a response to hardening of international crude oil rates to over $90 per barrel while the oil minister has preferred government subsidies to lessen burden on the common man. Diesel has a weightage of 4.67 per cent in inflation, while LPG contributes 0.91 per cent. A hike now would further accelerate inflation, which is currently at 7.48 per cent.
Mr Deora wants the government to make up for at least half of the Rs 72,812 crore revenue loss that state-owned oil firms are likely to incur this fiscal on selling diesel, LPG and kerosene below cost. The EGoM was originally scheduled to meet on December 22 but was deferred to December 30.
The meeting was deferred without a new date being given. He added the government would do everything possible to protect balance sheets of state-owned oil firms and insulate the common man from vagaries of the international market.