Public sector oil firm executives said they would go on an indefinite strike from 7 January, over the unkept promises by the government on wage demands.

The Oil Sector Officers Association (OSOA), an amalgamation of officers' unions of 14 state-run oil firms, said the wage hike approved by government in November worked out to Rs3,989 per month at the entry level and Rs2,217 at the highest level.

The association says it was fooled by the government, which said the hike was up to 200 per cent when the actual increase was only 17 per cent. The November pay hike was at the basic pay level and after the dearness allowance (DA) calculation, the net pay hike was minuscule, the association added.

The OSOA's had earlier submitted a 13-point charter of demands that included categorisation of all oil sector PSUs to the highest A+ category entitling workers to the best salary available for a government-sector company, removal of 50 per cent ceiling on perks and allowances, 50 per cent dearness allowance (DA) merger in line with central government employees, five-year periodicity of wage revision, introduction of open ended pay-scales.

PSU sector oil firm executives said the government had betrayed their trust while approving the wage hike in November.

OSOA president Amit Kumar said the association had been left with no choice but to resort to a strike because of "a series of betrayals".

"We have time and again been promised that our demands were being met but with no results," Kumar says.

OSOA had earlier threatened to go on indefinite strike from 18 November 2008 but deferred its agitation by a week following assurance from petroleum minister Murli Deora that the demand for higher pay package would be addressed as a committee of secretaries had approved higher wages for employees of all public sector units according to the recommendations of the Justice Rao Committee.

According to OSOA, in November 2008 the then finance minister P Chidambaram had agreed to a five -year periodicity of wage revision but the final approved wake hike maintained the wage revision with a 10-years periodicity.

Kumar said the government was using economic recession as an excuse to deny suitable wage hikes as the government was "unlikely to consider revising pay scales when the economy turns, which means the wages will be fixed for the next 10 years."

According to OSOA's estimates a one-day strike could lead to a Rs1,125-crore revenue loss for all the companies put together, while the government would also lose excise duty of over Rs100 crore a day.

This strike, if implement, at a time when the economy is going through its worst patch with government just coming out with a bail out package for the industry may hamper the growth of the country, affecting airlines, auto fuel supplies and cooking fuels.

Moreover, with the government just battling with inflationary pressures, this strike could also lead to inflation escalating with prices of commodities going high and affecting the masses.