HEADLINES:
September 16 2019
Oil cos may get to revise prices daily
10 August 2012

New Delhi: Stung by the mass protest against the price hike of petrol last May, the UPA government has decided not to pass on the current under-recovery of Rs 3.56 on a litre of petrol to the people.

At a meeting last Tuesday, the Prime Minister’s Office told the Petroleum Ministry that the government would work out cuts in customs and excise duties on petrol to offset the loss suffered by state-run oil marketing companies rather than pass the burden on to the consumers.

“It was decided not to allow the oil firms to raise consumer prices as it would add to the blooming inflation and evoke massive protests,” said an official present at the meeting. The extent of the duty cuts — to neutralise the required Rs 3.56 per litre hike — would be decided by the PMO, he said.

And once that is done, the ministry has been asked to work out the logistics of allowing daily changes in the price of the fuel that was deregulated or freed from government control in June 2010.

Unlike in most countries, petrol price in India is reviewed on the 15th and last day of each month but the so-called final decision is left to the political masters.

The OMCs have been regularly asking for increase in petrol price with the last request of a Rs 1.37 a litre hike earlier this month.

Petroleum Minister S Jaipal Reddy, however, discouraged them from doing so in view of the monsoon session of Parliament that started on Wednesday.

The OMCs’ blunder last May in raising petrol price by the highest-ever Rs 7.50 a litre had drawn political flak for Reddy.

The PMO is in favour of the daily revision as it would help the government to avoid such flak, said the official.

 

 

Related Stories