Congress in spot as allies nix fuel price hike

Petroleum minister Murli Deora will meet finance minister Pranab Mukherjee on Sunday to explore ways of softening the blow from a proposal to hike fuel prices. However, key allies in the government have strongly opposed the proposal.

The petroleum ministry did not take the proposal to the union cabinet which met on Thursday, apparently to forestall any opposition to the move from the Trinamool Congress and the DMK.

Home minister P Chidambaram said after a union cabinet meeting that the proposal was not discussed.

According to sources both Mukherjee and Deora had been favourably disposed to the proposed hike in prices of petrol, diesel and LPG but the allies did not want diesel, LPG and kerosene prices to be touched.

Without the hike, the state-run oil firms would be awash in red from a whopping Rs46,030 crore revenue loss in the fiscal, of which only Rs20,000 would be covered as subsidy support while the uncovered amount would be enough to erode the net-worth of the retailers.

According to sources, Deora will meet Mukherjee on 14 February in a bid to explore of limiting the hike to a bare minimum with additional subsidy support from the government.

Meanwhile, Deora met the prime minister after the cabinet meeting and submitted a memorandum seeking coverage of the unmet revenue loss on fuel sales.