Some media reports quoted Petroleum Minister Veerappa Moily as saying that the government would allow oil marketing companies (OMCs) to charge market price for all consumers in another 24 months.
It may be noted that recently, government allowed these firms to charge market price for only bulk consumers.
Further, the minister is quoted as saying that the government would stop providing fuel subsidies for any product other than LPG and kerosene in the next 2 years. It may be noted that diesel accounts for 60 percent of this yearÂ’s estimated fuel subsidy bill of Rs 1.7 lakh crore.
The minister was also quoted as informing that the country imports $160 billion worth of crude oil in a year which is 30 percent of all imports. Of this, $30 billion are under-recoveries which are making our oil companies bankrupt, he remarked.
The minister said he would write to all CMs, asking them to cut taxes as far as possible to mitigate the impact of the phasing out of subsidy on diesel.
For domestic LPG and kerosene, under-recoveries stand at Rs 490.50 per cylinder and Rs 30.64 per litre respectively. OMCs incur daily under-recoveries of about Rs 380 crore on the sale of diesel, kerosene and domestic LPG.
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