Another petrol price hike possible from June 1

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IMPHAL, May 31: A possible petrol price hike from June 1, remains unsure even as different speculations have been doing the rounds.

According to the news channel CNN-IBN, state-owned Indian Oil Corporation, the nation`s largest fuel retailer, on Tuesday announced that petrol prices will go up by Rs 1.35 per litre with effect from June 1.

The IOC says the May 15 hike in petrol prices by Rs 5 is not enough to cover the cost of crude oil and refining it.
According to the news chaneel, “Even after the hike, we are losing Rs 4.58 per litre. After including VAT, the desired increase at retail level comes to Rs 5.50 a litre,” IOC Chairman RS Butola said in New Delhi.

The IOC says this is because the Government doesn`t compensate the company for selling petrol below market rates.
The channel has further stated similarly, on domestic LPG India Oil is losing Rs 380.57 per cylinder and Rs 25.85 a litre on PDS kerosene.

An Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee is likely to meet on June 9 to consider raising prices of the three controlled commodities — diesel, domestic LPG and kerosene, according to the news channel.

Meanwhile, a headline in the web portal of the Hindu reads, `Oil firms unlikely to hike petrol prices on Wednesday`.

The news report states that wth the international crude oil prices showing signs of softening, the oil marketing companies (OMCs) are unlikely to undertake any further hike in petrol prices during their fortnightly review on June 1.

An indication to this effect was given by the Indian Oil Corporation (IOC) chairman, R.S. Butola, who said that the common man had already been burdened with a Rs. 5 per litre hike recently and there was no move to increase the burden further.

`Unlike the past weeks, our under recovery from petrol should be around Rs.1.10 per litre which is a bit comfortable than what we suffered in the past. We are certainly not looking at any kind of hike on June 1, and would review the situation next fortnight,` he added, stated the report.

Mr. Butola said the company was still losing Rs. 4.58 per litre on petrol even after the steep hike of Rs. 5 per litre from May 15. However, from June 1, the under-recovery is likely to come down to around Rs. 1.15 per litre.

Ruling out any kind of mechanical reaction to the fluctuation in crude oil prices, Mr. Butola said: `Ours is a dynamic economy. If losses again become unbearable, we will take the appropriate decision,` he said.

The newspaper has also maintained that ever since the Centre deregulated the pricing of petrol from June last, the State-owned oil marketing companies (OMCs) have been fixing the petrol price as per market rate. But in the wake of Assembly elections in five states, the petroleum ministry had given `unwritten` instruction to OMCs not to effect any hike in petrol prices despite the rise in global crude oil price. Officials in the Petroleum Ministry said the OMCs have been given an `oral direction` not to hike petrol prices any further, despite them being decontrolled in June last year.

`The Empowered Group of Ministers, headed by Finance Minister Pranab Mukherjee, is scheduled to meet on June 9 to take a decision on these three petroleum products. We are keeping our fingers crossed,` a senior Ministry official remarked.

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