India considers plans to increase fuel price

New Delhi, August 11:

The government will consult its Left allies next week on the proposed hike in prices of petrol, diesel and possibly kerosene and cooking gas as well. “Petroleum Minister Mani Shankar Aiyar is scheduled to meet Left parties next week to apprise them of the growing losses of oil marketing companies and seek their support for the proposed hike in prices of diesel, petrol and the cooking fuels,” official sources said. Ahead of the consultations with the Left allies, Aiyar today informed the Lok Sabha that due to the freeze in retail prices of the four fuels,

“liabilities of the state-owned oil marketing companies has reached Rs 200 billion Indian Currency (IC). If the current trend continues, their liabilities would mount to Rs 400 billion IC by yearend”.

Replying to issues related to the impact of global crude prices on domestic companies during question hour in parliament, Aiyar said, “We are trying to control the impact on people. But people may have to share some of the burden.” The minister clarified that “we will definitely consult all United Progressive Alliance (UPA) allies and supporting parties” before finalising any price hike. He gave an assurance that various options were being explored to reduce losses of oil marketing companies before to resorting to a price hike. “We are exploring the possibilities of asking the standalone refineries under the Essential Commodities Act and the Export-Import regulations to cut aviation fuel exports to meet the demand of the oil marketing companies first,” Aiyar said. He admitted that standalone refineries like Reliance were already

“giving considerable discount to state-run oil marketing companies.”