Deora, Pranab to meet again today on oil bonds issue

No decision was reached on issuing oil bonds to marketing companies or the method of compensating their under-recoveries at yesterday's meeting between Prime Minister Manmohan Singh, petroleum minister Murli Deora, finance minister Pranab Mukherjee, and heads of the oil marketing companies (OMCs).

The meeting was also attended by Planning Commission deputy chairman Montek Singh Ahluwalia and Kirit Parikh, who heads a high-level committee on fuel pricing. A decision is likely after another meeting between Deora and Mukherjee today.

''Tomorrow we will be meeting the finance minister to discuss issues like oil bonds, oil price hike, and everything else,'' S Sundareshan, special secretary in the petroleum ministry, told newspersons in New Delhi after Wednesday's meeting.

A hike in retail prices of petroleum is considered most likely in view of the ongoing inflationary pressures. In an interview with CNBC-TV18, petroleum and natural gas secretary R S Pandey said the issue of price hike could be taken up only by the cabinet.

Kerosene and liquefied petroleum gas (LPG) under-recoveries would be paid by the government, Pandey said, adding that the oil minister and the finance minister would discuss the compensation to be given to the oil marketing companies (OMCs). ''Kerosene and LPG under-recoveries for the month of December 2009 stood at Rs21,000 crore,'' he said.

He added hat the petroleum minister and finance minister would discuss how to compensate the oil companies for under-recoveries. Oil companies have been assured by the government that for kerosene and liquefied petroleum gas (LPG) the under-recoveries would be met by government, and for auto fuels the under-recoveries will be met by contributions from oil companies themselves.