CCEA to meet on Monday on fuel price hike

New Delhi: The Cabinet Committee on Economic Affairs will meet on Monday to decide on increasing petrol and diesel prices. The Cabinet had informally agreed on the need to raise petrol and diesel prices but a decision was not taken pending Left parties' approval, Finance Ministry sources said.

Defence Minister Pranab Mukherjee has been asked to consult Left parties on raising petrol and diesel prices by about Rs 2 each and convey their opinion to Finance Minister P. Chidambaram, sources said.

Officials said though petrol and diesel prices warrant a hike of Rs 4.5 and Rs 5 per litre on account of spurt in crude oil prices and rise in tax rates, government may settle for a hike of about Rs 2 each to limit the impact on the common man. The hike in excise duty on petrol and diesel and increase in road cess necessitate a Rs 2.20 per litre hike in petrol and Rs 1.06 a litre raise in diesel prices.

Additionally, the cost of supplying cleaner fuel from April 1 came to Rs 0.30 per litre for petrol and Rs 0.24 a litre for diesel. The remainder of the over Rs 4.50 a litre hike in petrol and more than Rs 5 per litre increase in diesel prices was warranted due to crude oil becoming dearer.

Indian Oil Corp, Bharat Petroleum Corp Ltd, Hindustan Petroleum Corp Ltd and IBP, who are together losing Rs 72 crore per day due to non-revision in petrol, diesel, LPG and kerosene prices, made a cash loss of Rs 1,424 crore in March and April.