Government puts off diesel price hike yet again

A decision on the revision and rationalisation of the price of diesel will be taken by the empowered group of ministers (EGoM), petroleum secretary S Sundereshan said on Thursday.

"This decision, consideration of revision, rationalisation of the price of diesel, will be examined by the EGoM. They would come to it by proper view. At this juncture we are addressing the question of the under-recoveries of the oil marketing companies (OMCs) and everybody can be rest assured that will be properly addressed," he said.

Speaking at a hurriedly-called press conference in New Delhi a day after a ministerial meeting on fuel prices was postponed indefinitely, Sundereshan said the government is committed to compensating state-owned firms for the revenue lost on selling fuel below cost.

He however said that it was too early to arrive at a figure. "The final accounts (of the OMCs) are not ready. We do not know how oil prices are going to behave in the next few months. I would like to reiterate that normally the final figure of burden sharing is decided in the last months of the financial year or sometimes in the early party of the next year," he said.

He said the upstream companies would share less than 33 per cent of the burden. "I am happy to say that there is absolutely clear understanding in the ministry of petroleum and natural gas, and we stand committed to it the upstream companies will not be sharing more than 33 per cent, which is what they were, in the recent past over the last three years upstream is always shared about 33 per cent."

He added, "With that understanding the follow-on public offer of Oil and Natural Gas Corporation Ltd (ONGC) will go full steam ahead and we are confident that the exercise of ONGC diversement will be completed before the end of March 2011."