Oil PSUs seek price hike as government sets up panel to look into gas policy

16 August 2007

Mumbai: Public sector oil firms have sought an immediate hike in the prices of cooking gas (LPG), kerosene, petrol and diesel, even as the government set up a an empowered group of ministers to decide on pricing and utilisation of gas from new fields like Reliance Industries' KG-D6.

The decision to review gas pricing formula follows disputes over Mukesh Ambani-led RIL's demand for $4.33 to $4.58 per million British thermal units for gas to be produced from the KG-D6 block off the east coast.

RIL's proposed rates were opposed by key consumers like power and fertiliser sectors in general and Mukesh's younger brother Anil in particular.

The cabinet secretariat issued the notification constituting an 8-member group on August 13 headed by external affairs minister Pranab Mukherjee. The group will be serviced by the petroleum ministry, which will place all relevant material, including the earlier report of the committee of secretaries, before it, a notification said.

State-run oil companies, meanwhile, said they are losing over Rs185 crore per day on sale of the four fuel products as subsidy amount had failed to compensate for the rise in prices of crude and natural gas.