An Empowered Group of Ministers headed by Finance Minister Pranab Mukherjee is likely to meet by end-December to consider raising prices of diesel and domestic LPG."We are hopeful of an EGoM meeting soon . . . hopefully it will meet before month end," Oil Secretary S Sundareshan told reporters in New Delhi.
The EGoM was originally scheduled to meet on Wednesday but has been deferred because of non-availability of certain ministers in the grouping.
There was a need to raise diesel and LPG prices in view of surge in international oil prices but refused to say the quantum of hike the EGOM may consider, Sundareshan said.
"The agenda of the meeting will be finalised a day before the meeting," he said.
The EGoM may consider a Rs 2 per litre hike in diesel prices to narrow the difference between the domestic retail price of the transport fuel and its imported cost.
"The under-recovery (or the revenue oil companies lose) on diesel today stands at Rs 6.08 per litre," he said.
Besides diesel, the oil firms lose Rs 17.72 per litre on PDS kerosene sales and Rs 272.19 per 14.2-kg LPG cylinder.
There 'certainly' was a need to raise LPG prices as the expert group on fuel pricing headed by Kirit Parekh had suggested hiking domestic cooking fuel price by Rs 100 per cylinder but rates were increased by only Rs 35 per bottle in June, Sundareshan said.
"Certainly there is a case for increase. . . but I cannot say if the prices will actually be hiked," he said.
The necessity of a price increase has arisen because global crude oil (raw material) has climbed to $90 per barrel from $73-74 at the time of last revision in June.
Even after last week's steep Rs 2.94-2.96 a litre hike, the retail price of petrol is Rs 1.2-1.25 a litre short of the imported cost.
The government had in June this year freed petrol prices, but the state firms, who control 98 per cent of the retail market, continue to informally consult the oil ministry before revising prices.
Also, the government had decided to make diesel price market-determined in stages.
"Freeing diesel prices at current crude prices is simply not possible," he said.
The three firms are projected to end the fiscal with a Rs 68,361-crore (Rs 683.61-billion) revenue loss on account of the sale of diesel, domestic LPG and kerosene below cost.
"They are losing Rs 215 crore (Rs 2.15 billion) per day on the sale of the three products. Also there are marginal under-recoveries on petrol," the official said.
