Oil prices put-off for this week

Faced with opposition from within the ruling coalition, the government has put-off till at least next week a decision on raising fuel prices that have been necessitated due to crude nearing USD 100 a barrel globally.

The petroleum ministry is considering a proposal to either raise petrol and diesel prices by Rs 2 and Re 1 a litre respectively or cutting duties to offset the impact of higher international oil prices. However, the proposal is not being pursued by the Cabinet this week.
"We are trying to see if we can find a solution next week," Petroleum Minister Murli Deora told reporters here.

Deora, however, did not say why he was going back on his last week's statement of taking a decision this week.
Sources said Prime Minister Manmohan Singh as well as UPA Chairperson Sonia Gandhi were against the idea of taking a "harsh" decision just before the Diwali festival. Besides, the Congress party had also opposed any move to raise fuel prices.

Petroleum Secretary M S Srinivasan said oil companies' under-recovery on fuel sales is estimated to increase to Rs 70,500 crore for a full fiscal year on current prices. Based on the government's decision last month, oil marketing firms such as IOC, BPCL and HPCL would get 42.7 per cent or about Rs 30,000 crore in oil bonds. In addition, upstream companies like ONGC will share 35 per cent of the under-recovery.

Courtesy:thehindu.com
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