Oil minister Jaipal Reddy today pressed for a hike in diesel and domestic LPG cylinder prices before Prime Minister Manmohan Singh.
PSU retailers Indian Oil, BPCL and HPCL were suffering daily revenue losses of Rs 450 crore, and officials said the oil ministry was lobbying for a hike of at least Rs 3-5 per litre in diesel and Rs 25-50 per LPG cylinder.
Reddy’s meeting comes a day after the CAG criticised the oil ministry’s role in approving Reliance Industries’ KG-D6 field cost. The oil minister briefed the Prime Minister about his ministry’s stand on the CAG’s draft report.
While Reddy refused to comment on his 15-minute meeting with the Prime Minister, officials said the meeting was fixed much before the CAG submitted its draft report on June 8.
Reddy’s meeting today with the Prime Minister was on fuel prices.
The oil minister had last week met Mukherjee to push for a fuel price hike. Oil companies are losing Rs 14.22 on the sale of every litre of diesel. In addition, they lose Rs 27.47 on a litre of kerosene and Rs 381.14 per 14.2-kg domestic LPG cylinder.
The three firms may end the fiscal with a revenue loss of Rs 160,568 crore, at least half of which will have to be met by the government from its budget. The rates for the three products were last hiked in June 2010, when crude was ruling at $72 per barrel.
The basket of crude India buys averaged $110 a barrel this month.
The CAG report alleged that the oil ministry bent the rules to allow Reliance Industries to benefit at the cost of the government’s own financial stake in the development of the country’s largest gas fields in 2004-06.
Reliance is developing the D-6 gas field in the Krishna-Godavari basin.
The report by the Comptroller and Auditor General (CAG) states that the company revised the costs of developing the field by more than $6 billion.
“However, at this stage, based on the information provided, we are unable to comment on the reasonableness, or otherwise, of the increase in cost, both overall and in respect of individual line items,” the CAG said.
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