Coimbatore: The Union Government is expected to raise petrol and diesel prices moderately by the middle of January to help state-run oil firms reduce the loss they are incurring on selling fuel below cost.
"Be prepared for a modest or moderate hike in the prices of petrol and diesel, after a meeting of the Group of Ministers in the first week of January," Petroleum Secretary M S Srinivasan said.
"We are definitely not ruling out the hike. There will be a hike," he said.
Asked to quantify the hike, Srinivasan declined to directly specify it but indicated that the hike would be just the price of tea here (Rs two to Rs three).
To a question on the hike of LPG prices, Srinivasan said the government was providing domestic cooking gas for around Rs 290, nearly half that of the actual cost.
The Group of Ministers, headed by External Affairs Minister Pranab Mukherjee, was slated meet for the first time on December 14 but the meeting was postponed.
Indian Oil, Bharat Petroleum and Hindustan Petroleum are projected to lose Rs 69,753 crore on sale of petrol, diesel, LPG and PDS kerosene as the government has not allowed them to raise prices in line with the price of imported crude.
The government had last increased petrol and diesel prices on June 6, 2006.
Petrol is being sold at a loss of Rs 8.74 a litre, diesel at Rs 9.92 per litre, kerosene Rs 20.53 a litre and LPG at a loss of Rs 256.35 per cylinder.
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