There would be no rollback of the recent diesel price hike and cap on subsidised cooking gas cylinders unless global crude oil prices eased, Oil Minister S. Jaipal Reddy has said.
Addressing the Economic Editors’ Conference here, Reddy said persistently high crude oil prices and rupee depreciation had resulted in oil marketing companies (OMCs) making huge under recoveries on the sale of diesel, LPG and kerosene.
He said the government was committed to making available essential fuels, to the common man at affordable prices.
Diesel prices were increased by Rs.5 per litre and government imposed a cap of six subsidized cylinders in a year per household.
The oil minister said despite these measures the under-recoveries of the OMCs for the year 2012-13 are projected to be around Rs.1,67,415 crore.
He said the subsidy burden for upstream companies like Oil India and ONGC has been put at $56 per barrel for the whole year.
For the first half of the current financial year, the oil ministry has sought Rs.89,000 crore as compensation for OMCs against the losses they incur due to under-recoveries.
Indian Oil Corporation cut the price of petrol by 56 paise per litre with effect from Tuesday following some appreciation of the rupee against the US dollar.