An empowered group of ministers will meet on 7 June to decide on the proposed hike in the retail prices of petrol and diesel, petroleum minister Murli Deora said today.
"The petroleum and natural gas ministry is working out a formula addressing the under-recovery of losses faced by government-owned oil marketing companies," Deora said on the sidelines of a meeting in Chennai.
Deora, however, said the government will take a balanced view taking into account the interests of consumers and vulnerable sections of the society as also the needs of the oil companies.
The increase in petrol and diesel prices follows a spike in the prices of crude oil in the international markets.
"The international price of crude oil is around $85 per barrel now. At this price, the oil companies will face an under-recovery of over Rs100,000 crore," according to petroleum secretary S Sundareshan.
Over and above this, he said, the increasing debt burden of oil marketing companies (Rs88,300 crore as at the end of last fiscal) is turning their debt-equity ratios adverse.