CCPA to decide on fuel price hike

In a move to curtail the financial deficit by reducing its burden from fuel subsidy, Cabinet Committee on Political Affairs (CCPA) will meet to decide on raising the price of diesel, cooking gas and kerosene. The panel chaired by Prime Minister Manmohan Singh, might also consider a trim in Rs 14.78 per liter excise duty currently levied on petrol, other than considering hike in diesel, domestic LPG and PDS kerosene rates.

The diesel and cooking fuel rates have not been revised since June last year, albeit huge rise in global crude oil prices and devaluation of rupee has made imports costlier. The state owned oil companies have claimed a loss of over Rs 560 crore per day on the sale of regulated diesel and cooking fuels, and another Rs 16 crore a day on petrol. They are losing about Rs 6 per liter on sale of petrol, though the commodity is not in control by the government since June 2010 but has not moved in line with the hike of its cost price.

These oil marketing companies incur a loss of about Rs 19.26 per litre in selling diesel and about Rs 347 per 14.2-kg cylinder and about Rs 34.34 per litre in kerosene. The Petroleum Ministry in a note to CCPA has suggested that supply of subsidized LPG cylinders should be limited to four to six per household in a year and also proposed a cancelation of subsidy in LPG cylinders for households with income of more than Rs 50,000 per month or Rs 6 lakh in a year.