26 June : EGoM headed by Finance Min Pranab Mukherjee has cleared decontroling the prices of Petrol which makes it dearer by upto Rs 3.5 /litre while Diesel will be costlier by Rs 2/litre and LPG cylinder to cost Rs 35 more whereas kerosene will be dearer by Rs 3/litre from Friday.
In a major decision to bring petroleum products in line with market rates, the government on Friday freed petrol from all pricing controls and hiked diesel prices by Rs. 2 a litre, Oil Secretary S. Sundareshan announced after the meeting of the Empowered Group of Ministers (EGoM) in New Delhi on Friday.
Even diesel prices will be eventually freed of all administrative controls, Sundareshan said.
The decisions, taken by the EGoM headed by Finance Minister Pranab Mukherejee, were timed appropriately to take advantage of relatively lower global crude prices, which are hovering around $77 a barrel.
Besides, this would also help cut down on the government’s huge subsidy bills, as also relieve the oil marketing PSUs of staggering burden on account of selling these fuels much below the market prices.
Sundareshan said that the government would, however, continue to “heavily subsidise” the cooking fuels.
Oil Minister Murli Deora had, on more than one occasion, briefed the Prime Minister Manmohan Singh and Mukherjee on the crisis that would befall oil PSUs if no decision was taken on hiking prices.
In May, WPI-based inflation provisionally entered double digits at 10.16 percent.
State oil firms currently lose about Rs. 215 crore per day on selling fuel below the imported cost.
At present, petrol is being sold at Rs. 3.73 a litre below its cost, diesel at a loss of Rs. 3.80 per litre, kerosene at Rs. 18.82 a litre and domestic LPG at a discount of Rs. 261.90 on every 14.2-kg cylinder. (DD-25.6)
Govt to release more wheat in open mkt to check prices
The government Friday decided to release five million tonnes of wheat in the open market and retain zero duty on sugar and wheat imports in the wake of soaring food prices.
The empowered group of ministers (EGOM), headed by Finance Minister Pranab Mukherjee, decided to offload wheat under the Open Market Sale Scheme (OMSS) at prices lower than the market price.
Wheat will be sold from the government godowns between July and March at Rs 12.54 per kg against retail price of around Rs 14 a kg in Delhi.
As on 12th June, the annual food inflation touched 16.90 per cent. The government has been under attack from the Opposition parties for soaring prices.
Despite a sharp fall in sugar prices to Rs 32-34 a kg from nearly Rs 50 a kg five months ago, the ministers’ panel did not want to take a chance and retained the zero-duty regime for the import of the refined sugar.
The EGoM felt although sugar prices have dropped in the last few months, they are still high as compared to last year’s, sources said.
Even for wheat, the same view prevailed in the meeting, sources said.
The government has been selling wheat in the open market since October 2009. As much as 1.2 million tonnes of wheat has been lifted as of now out of two million tonne allocated for the open market operation.
India imported 1.58 lakh tonnes of wheat last year and 2 lakh tonnes during April-May this fiscal.
The country imported 6 million tonnes of sugar since February, 2009.
