A fuel price hike was imminent and sources claim the government may allow oil marketing companies to go ahead with a petrol price hike of Rs 5 per litre.
CNBC-TV18's Nayantara Rai reports quoting oil ministry sources that the development in the pricing front is expected in the next 24 to 48 hours. They feel there is no reason for the oil marketing companies to wait after the monsoon session of parliament concludes to increase prices, adding that the Prime Minister’s Office as well as the Finance Ministry are on board.
The oil marketing companies have already lost Rs 600 crore in Q1. They are not compensated for petrol sales and therefore, there is not reason to not allow them to hike prices.
Even for the under recovery figure of diesel, LPG and kerosene, the companies have still not received any support from the centre. They are unlikely to receive any support till the end of December.
The next big question is then when will prices of diesel and LPG be hiked? Sources say, a cabinet note has been sent from the Oil Ministry to the cabinet secretariat proposing a price hike on diesel and LPG.
The quantum might not be there, but the union cabinet will be asked to support a steep price hike saying that it is very much the need of the hour as the Companies have to be protected.
Also, this cabinet note will have some proposals on how to try and reduce subsidy incurred on LPG sales. Therefore, it is set for two reforms, one would be capping the number of LPG cylinders to 4 and 6 per family. However, the other proposal for the rich and MPs to voluntarily give up the LPG subsidy is something the Oil Ministry is not in favour of.
The ministry will also ask the cabinet to try and increase the price of kerosene.
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