Government trying its best to hold fuel prices: Deora

Petroleum minister Murli Deora today said that a decision may be taken on freeing petrol and diesel prices after an expert committee on fuel pricing submits its report this week.

Finance minister Pranab Mukherjee is believed to be in favour of freedom for state-run oil firms to fix prices of petrol and diesel in line with costs.

Deora told reporters in New Delhi the government was trying its best to ensure that prices were not raised.

However, according to analysts, a rate hike may be unavoidable as the governmenta seeks to cover the shortfall of lost revenue due to the sale of petrol, diesel, LPG and kerosene below cost.

According to Deora, in July 2009, the cabinet decided that the government would meet all the under-recovery (revenue loss) on domestic LPG and kerosene through either bonds or cash and the same on petrol and diesel would be met by upstream companies like ONGC.

While the entire Rs8,364 crore under-recovery on petrol and diesel was borne by Oil and Natural Gas Corp (ONGC), Oil India (OIL) and GAIL in first three quarters of current fiscal, the government had agreed to give only Rs12,000 crore in cash against the Rs20,989 crore revenue loss on cooking fuel in April-December.