Oil minister rules out immediate hike in fuel prices

New Delhi: Oil Minister Jaipal Reddy today ruled out an immediate hike in fuel prices, saying there is no such plan. Mr Reddy spoke to the media at an Indian Oil event in New Delhi.

Sources have informed NDTV that the hike in all fuel prices has been deferred by a week.

"It is my duty as a minister to bring out the facts in front of the Cabinet Committee of Political affairs…don’t know when the CCPA will take up the issue,” he said, adding that  there is a need to reduce the under-recoveries of oil marketing companies.

This led to an immediate drop in the share prices of oil marketing companies, with Bharat Petroleum falling the most at 3 per cent. Hindustan Petroleum and Indian Oil also saw selling pressure. HPCL was down 2.75 per cent, while IOC traded 1.9 per cent lower.

Indian Oil chairman R.S. Butola, who was also present at the event, said oil companies were currently losing nearly Rs. 6 per litre on petrol sales.

"There is a need to raise petrol prices. We are in consultations with our colleagues at other oil marekting companies and stakeholders," Mr Butola said.

There were reports on Thursday that oil companies were going to hike the price of petrol by as much as Rs. 5, and that prices of diesel and kerosene, which are regulated, will increase next week.

State-run oil marketing companies are losing Rs. 550 crore everyday on under-recoveries as a result of higher crude prices in the global markets.

They make a loss of Rs. 17/litre on diesel sales, Rs. 32.7/litre on kerosene sales, and Rs. 347/cylinder on cooking gas sales every day.

Fuel prices won't be hiked, for now: Jaipal Reddy

New Delhi: Oil Minister Jaipal Reddy today ruled out an immediate hike in fuel prices, saying there is no such plan. Mr Reddy spoke to the media at an Indian Oil event in New Delhi.

Sources have informed NDTV that the hike in all fuel prices has been deferred by a week.

"It is my duty as a minister to bring out the facts in front of the Cabinet Committee of Political affairs…don’t know when the CCPA will take up the issue,” he said, adding that  there is a need to reduce the under-recoveries of oil marketing companies.

This led to an immediate drop in the share prices of oil marketing companies, with Bharat Petroleum falling the most at 3 per cent. Hindustan Petroleum and Indian Oil also saw selling pressure. HPCL was down 2.75 per cent, while IOC traded 1.9 per cent lower.

Indian Oil chairman R.S. Butola, who was also present at the event, said oil companies were currently losing nearly Rs. 6 per litre on petrol sales.

"There is a need to raise petrol prices. We are in consultations with our colleagues at other oil marekting companies and stakeholders," Mr Butola said.

There were reports on Thursday that oil companies were going to hike the price of petrol by as much as Rs. 5, and that prices of diesel and kerosene, which are regulated, will increase next week.

State-run oil marketing companies are losing Rs. 550 crore everyday on under-recoveries as a result of higher crude prices in the global markets.

They make a loss of Rs. 17/litre on diesel sales, Rs. 32.7/litre on kerosene sales, and Rs. 347/cylinder on cooking gas sales every day.

Petrol prices likely to be hiked by Rs. 5 today

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.