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Energy: Cut in petrol, diesel prices on the cards |
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The Government is likely to take a view this week on the quantum of cut in petrol and diesel prices and build a consensus on a possible reduction in domestic LPG prices.
A cut of about Rs 4-5 a litre on petrol and Rs 1-2 on diesel a litre is on the cards. Also under consideration was a proposal to slash domestic LPG prices by Rs 20-25 a cylinder. However, the price of kerosene sold under the public distribution system (PDS) is expected to be left untouched. The Government had on December 5 announced a cut in price of petrol by Rs 5 a litre and diesel by Rs 2 a litre, leaving the prices of cooking fuels untouched.
The public sector oil marketing companies (OMCs) – Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation - are currently making a profit of Rs 7.50 a litre on petrol and Rs 2.50 a litre on diesel. However, they are still incurring revenue loss on sale of LPG and kerosene. The under-recovery on LPG stood at Rs 32 a cylinder and on kerosene at Rs 14 a litre.
The revenue loss to be incurred by the OMCs for the full fiscal is expected to be Rs 1,01,445 crore down from the earlier estimate of Rs 2,45,305 crore with the softening of the crude. The OMCs incur revenue loss due to selling petroleum products below the cost price.
The basket of crude oil India buys has averaged $ 44.12 a barrel this month against the December average of $ 40.61 a barrel. Indian basket of crude has averaged $ 93.61 a barrel this fiscal as opposed to $ 79.25 a barrel average procurement price in 2007-08.
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