The Oil ministry is likely to seek Rs 60,000-70,000 crore compensation from the finance ministry for oil marketing companies in FY14, exclusive sources
The oil ministry is of the opinion that Rs 20,000 crore compensation proposed earlier is not sufficient considering the scenario wherein crude has got expensive due to the falling rupee. However, there is a case of diesel, liquefied petroleum gas (LPG) price hike but no formal proposal has been submitted so far, sources further said.
State-run retailers sell diesel, kerosene and cooking gas at government-dictated prices, which is often below market rates and a major chunk of the revenue losses is compensated by the government, while balance is shared between state-run upstream companies and fuel retailers like Bharat Petroleum , Hindustan Petroleum and Indian Oil Corp .
Meanwhile, oil minister Veerappa Moily has said, there is no immediate plan to relax diesel pricing norms. The minister has so far maintained that the quantum of hike will not increase and a 50 paise/litre hike is not huge.
The minister has a few days back said that diesel prices would not be increased by a higher quantum despite a depreciating rupee. Oil marketing companies (OMCs) will only be allowed to increase diesel prices by the mandated quantum of 45 paise to 50 paise per litre, he had said.
Since January this year, HPCL.BPCL and IOC have started raising diesel price by not less than 50 paise/litre as directed by the government.
These companies last hiked price on July 1 and diesel now cost Rs 57.61 in Mumbai and around Rs 50.84 in New Delhi.
