By IANS
New Delhi : Expressing concern over the steep rise in global crude oil prices, Prime Minister Manmohan Singh said Monday that the government will examine Jan 17 all options to cushion losses suffered by oil marketing frms.
“A group of ministers will meet Jan 17 to look at all the possibilities,” the prime minister told reporters after a Rashtrapati Bhavan ceremony at which new Comptroller and Auditor General (CAG) of India Vinod Rai took over.
“The steep rise in international crude prices is a cause of concern and the group of ministers will look at the various available options to moderate its impact on oil marketing companies,” Manmohan Singh said.
The prime minister, however, refused to say if the government would raise fuel prices so that oil-marketing companies are able to cut their losses, after oil prices topped $100 in the international market.
The group of ministers was constituted by the prime minister in November last year to suggest ways to soften the impact of the rising global crude oil prices on the government-owned oil marketing companies.
The combined losses of oil marketing companies in 2007-08 are projected to breach the Rs.700 billion ($17.8 billion) if the government does not allow them to raise prices.
The government has so far issued bonds worth Rs.235 billion ($6 billion) to oil marketing companies in fiscal 2007-08 as its contribution under the subsidy-sharing formula.
Petroleum Minister Murli Deora had earlier hinted that the government was also looking at options like rationalisation of duty and taxes on petroleum products suggested by Left leaders to help oil marketing companies reduce losses.
“There are other options like excise duty cut that have been suggested by the Left. We’ve got to find the best solution,” Deora said last week, while adding thst the group of ministers would consider these alternate options.
He said he had met various Left leaders including Sitaram Yechury of Communist Party of India-Marxist late last week, who assured him assistance in finding a solution to the present crisis.
Deora has also asked Brihan-Mumbai Municipal Corp to rationalise octroi levied on crude oil procured from refiners in Mumbai from state-owned oil marking firms like Bharat Petroleum Corp and Hindustan Petroleum Corp.
“This levy has been putting additional burden on them. They are already facing heavy under-recoveries (losses) in their effort to insulate consumers against high volatility in global crude oil prices,” Deora said.