Fuel hike inevitable
Union petroleum minister, Murli Deora, reviewed the fuel price situation with the heads of the three OMCs and ONGC. The oil companies demanded an increase of Rs 10 per litre in the price of petrol and Rs 5 per litre in diesel. .
A minor four-paise increase in the price of both petrol and diesel was announced late on Friday night, to take into account dealer commissions, but a substantial increase ,even if nowhere near the extent demanded by the oil companies , does not appear likely immediately because of the vehement opposition of the Left parties and other UPA allies, as well as reservations within the Congress Party itself.
Sources said the oil companies told Deora that at current prices the under-recoveries of the companies will triple to Rs 2.3 lakh crore this year from Rs 70,500 crore last year. They said that with every $1 increase in the price of crude, the under-recoveries for the whole year increase by Rs 3,000 crore.