LD PETROL 2LST

LPG in Delhi costs Rs 310.35 per 14.2-kg cylinder since
April 1 when the state government withdrew subsidy on the
fuel.
The last major revision in kerosene price, which
currently costs Rs 9.32 per litre in Delhi, was on March 1,
2002 when rates were hiked by about Rs 1.60 per litre.
Sundareshan said Friday's decisions will help bring down
the revenue oil PSUs lose on selling fuel by about Rs 21,000
crore to Rs 53,000 crore. "This (Rs 53,000 crore) under
recovery will be borne by the Government and upstream oil
companis like ONGC," he said.
The government's own economic adviser Kaushik Basu said
monthly inflation, currently at 10.16 per cent, could go up by
0.9 percentage points as a result of the decision.
Sundareshan said decontrol of petrol price would result
in reduction in under recoveries (revenue loss) of oil PSUs by
Rs 7,000 crore.
Before today's hike, the oil Public Sector Undertakings
were projected to lose Rs 74,300 crore on selling petrol,
diesel, domestic LPG and kerosene below cost. Diesel price
hike would cut revenue loss by Rs 9,000 crore and cooking fuel
price increase would help them garner Rs 5,000 crore.
A lower fuel subsidy bill may help the government reduce
the fiscal deficit substantially. It was an estimated 6.9 per
cent last year.
The move would also help private retailers like Reliance
Industries and Essar Oil who had in 2008 mothballed their
petrol pumps nationwide after they couldn't match prices
offered by state-run rivals.
The EGoM decision were based on recommendations of the
expert group headed by former Planning Commission member Kirit
Parikh. The group had called for freeing petrol and diesel
prices from state control and raising LPG rates by Rs 100 per
cylinder and kerosene by Rs 6 per litre.
The National Democraticv Alliance government had in April
2002 freed petrol and diesel prices from government control
and allowed Indian Oil, Bharat Petroleum and Hindustan
Petroleum to fix prices on 1st and 16th of every month based
on the fortnightly average of international rates.
This practice was stopped just before the General
Elections in 2004. The UPA Government in June 2004 formally
took over the task of fixing auto fuel prices. PTI ANZ
KAB


The information contained in this electronic message and any attachments to this
message are intended for the exclusive
use of the addressee(s) and may contain proprietary, confidential or privileged
information. If you are not the intended
recipient, you should not disseminate, distribute or copy this e-mail. Please
notify the sender immediately and destroy
all copies of this message and any attachments contained in it.