Prime Minister Manmohan Singh, Oil Minister Murli Deora, Finance Minister P Chidamabaram and UPA Chairperson Sonia Gandhi met yesterday in the evening. Though there was no final decision, CNBC-TV18 has learnt that it has been agreed to marginally increase the price of petroleum products for the moment.
The consensus is that petrol price could go up by Rs 3 and branded petrol even more. No consensus has been reached yet on a hike for diesel prices.
Deora said that he is not very sure what the bail out package for OMCs (oil marketing companies) will. It may be a mix of price hikes, duty cuts and bonds and the Finance Minister would take a call on it, he said.
Deora also said that the cabinet meet on the fuel price hike is likely to be tomorrow. The crude prices soaring and something definitely needs to be done, he said.
CNBC-TV18's Abhijit Neogy said there are two scenarios floating around for the quantum of a price hike: Rs 4 per litre for petrol and Rs 2 for diesel or Rs 3 per litre for petrol and Rs 2 for diesel.
Excerpts from CNBC-TV18's exclusive interview with Murli Deora:
Q: There are so many options being floated around - what are the options that our government has really zeroed in after the meeting with the Prime Minister?
A: Due to the very unprecedented rise in the oil price, we are trying to find solutions to this. The only solution is to realise more money so that oil companies would buy the products we are selling. We are trying to see that all the PSUs, Hindustan Petroleum and Indian Oil Corporation are galvanized to face this situation.
Up until now, there has hardly been a problem and there is no question of any rationing. I would appeal to the people to kindly corporate with the authorities in case there is a shortage .
Q: What people are wanting to know is the price hike, is there going to be a price hike? What are the options? Is it a price hike, bonds and duty cuts?
A: The oil price which was USD 60-70 per barrel has gone up now to USD 130-132 per barrel. The public sector oil companies are losing a lot of money. The government may either give them some more subsidy or allow them to rise price. Something needs to be done and this is what we are contemplating. I’m sure tomorrow we will be able to find a solution to this.
Q: You are basically saying that price rise is also one of the options being considered?
A: There are various options considered, I can’t say which will be accepted by the cabinet and the government.
Q: The Finance Minister has steadfastly refused to go in for duty cuts, either excise cuts or customs cuts. In the meeting with the Prime Minister has he agreed to any kind of duty cuts excise or customs?
A: The Finance Minister has been co-operative and I would say that he has totally refused duty cuts.
Q: So he has basically signaled his intention to at least go in for a marginal reduction in excise duty, can we say that?
A: I can’t say that is not in my hands.
Q: Have you got any indication that there is a margin reduction of excise duty at least happening on petro- products?
A: Unless and until it is approved by the cabinet it’s not possible for me to say.
Q: But the package that you are contemplating will have duty cuts, price rise and bonds?
A: The package we are contemplating cannot be revealed just now because it is not finalized and when it is finalized we will be the first to reveal them.
Q: When is the cabinet meeting - is it going to happening this evening or is the cabinet meeting going to be convened tomorrow?
A: I don’t know whether it will come today or tomorrow.
Q: If the Left has forwarded its own proposals, tax private refiners who have got windfall profits. They have infact proposed a new tax windfall profit tax how do you react to that?
A: I am not for that and that is for the Finance Minister to reply to them; I have nothing to do with this.
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