A steep hike in petrol prices is likely to be announced on Friday. State-run oil marketing companies are losing Rs. 550 crore everyday as under-recoveries on account of higher crude prices in the global markets.
Sources told NDTV that oil firms may increase petrol prices by a steep Rs. 5 per litre. Oil marketing firms are not compensated for petrol sales because the government had decontrolled petrol price in June 2010. The government is also likely to push for a hike in other fuel products, including diesel, soon.
The development comes two days after the Petroleum Ministry sent a comprehensive note to the Cabinet Secretariat listing various options for increasing the prices of diesel and LPG.
An increase in fuel prices is necessary to cut down government's subsidy payout as state-owned oil firms are projected to lose Rs. 200,000 crore on selling fuel below cost in the current fiscal. As per present policy, the government will have to make good half of it by way of cash subsidy.
Oil firms are currently losing Rs. 1.37 a litre on petrol, Rs. 17 a litre on diesel, Rs. 32.7 per litre on kerosene and Rs. 347 per cylinder of domestic cooking gas.
Prices of diesel as well as LPG and kerosene have not been increased since June last year, although the cost of production has jumped nearly 28 per cent, industry sources earlier said.
Oil companies revised prices of petrol only on four occasions this fiscal year: a hike of Rs. 7.54 a litre on May 24, followed by a partial rollback by Rs. 2.02 per litre on June 3, and a reduction of Rs. 2.46 a litre on June 29, followed by a marginal hike of Rs. 0.70 a litre on July 24.
Meanwhile, key UPA ally Trinamool Congress has said it will oppose any hike in fuel price.
"We are against any kind of price hike," TMC leader and Railway Minister Mukul Roy said.
Sources told NDTV that oil firms may increase petrol prices by a steep Rs. 5 per litre. Oil marketing firms are not compensated for petrol sales because the government had decontrolled petrol price in June 2010. The government is also likely to push for a hike in other fuel products, including diesel, soon.
The development comes two days after the Petroleum Ministry sent a comprehensive note to the Cabinet Secretariat listing various options for increasing the prices of diesel and LPG.
An increase in fuel prices is necessary to cut down government's subsidy payout as state-owned oil firms are projected to lose Rs. 200,000 crore on selling fuel below cost in the current fiscal. As per present policy, the government will have to make good half of it by way of cash subsidy.
Oil firms are currently losing Rs. 1.37 a litre on petrol, Rs. 17 a litre on diesel, Rs. 32.7 per litre on kerosene and Rs. 347 per cylinder of domestic cooking gas.
Prices of diesel as well as LPG and kerosene have not been increased since June last year, although the cost of production has jumped nearly 28 per cent, industry sources earlier said.
Oil companies revised prices of petrol only on four occasions this fiscal year: a hike of Rs. 7.54 a litre on May 24, followed by a partial rollback by Rs. 2.02 per litre on June 3, and a reduction of Rs. 2.46 a litre on June 29, followed by a marginal hike of Rs. 0.70 a litre on July 24.
Meanwhile, key UPA ally Trinamool Congress has said it will oppose any hike in fuel price.
"We are against any kind of price hike," TMC leader and Railway Minister Mukul Roy said.
