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Pranab hints at likely hikes in fuel price
NEW DELHI, MAY 21 (AGENCIES):
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Published on 22 May. 2010 12:06 AM IST
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Finance Minister Pranab Mukherjee has hinted that the government may increase fuel price to meet the burden of subsidies.
Mukherjee told a television news channel that the “system” cannot bear the cost of subsidies and a “realistic assessment” will have to be made.
“As far as the oil pricing policy is concerned, we shall have to address it,” said Mukherjee when he was asked how the government planned to meet expenditure for subsidised fuel.
Mukherjee said a group of ministers (GoM) with him as the chairperson is studying the problem. “What decisions the group of ministers will take I cannot forecast it and I cannot make any premature declaration but we shall have to address the problem. The system does not have the capacity to bear the level of subsidy-- therefore some realistic assessment will have to be made which will be borne by the system,” he said, according to CNN-IBN.
The GoM will meet on June 7 to decide on freeing petrol and diesel prices from government control. The step will benefit state-owned oil marketing companies Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum which are losing about Rs 255 crore every day by selling fuel below cost.
The oil companies sell petrol at a loss of Rs 6.07 a litre and diesel at a loss of Rs 6.38 per litre. If fuel prices are freed from government control, petrol rates may rise by Rs 6 a litre.

 
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