Click to play videoNew Delhi: The Government will take a decision on whether to raise prices of petroleum products next week though global oil prices have are nearing $100, causing huge losses to public sector oil companies.
"We are trying to see if we can find a solution next week," Petroleum Minister Murli Deora said in Delhi on Wednesday. Deora had on November 2 said he would take a decision this week.
"The government is very much alive to the problems. We are trying our best to resolve this problem as early as possible," he said. "We are considering various alternatives, including duty restructuring and increase in prices".
Deora will meet Prime Minister Manmohan Singh on Wednesday when crude prices hit a lifetime high of $97 a barrel and may touch $100 per barrel.
Domestic oil companies are suffering huge losses due to high prices .The Indian crude basket, the price at which companies buy oil, has increased by 52 percent since February.
Sai Narsimha, Director, Finance at the Indian Oil Corporation, says the company sees its losses going up by Rs 3,000 crore if global crude price continues to rise . "Our under-recoveries are coming out to be Rs 122 cr per day. We have incurred huge losses,” said Narsimha.
At the current prices the total revenue loss of oil companies stands at Rs 54,935 crore and total losses at Rs 60,000 crore. The Government has three options to help the oil companies: the first is to hike prices of petrol and diesel.
A marginal hike could be on the cards but Gujarat elections and the Left could make the Government stay away from this politically sensitive decision.
The second option is to cut excise duties on petrol and diesel, but Finance Minister P Chidambaram is strongly against this.
The third option is to issue more oil bonds or transfer a part of the cost burden to companies like the Oil and Natural Gas Commission and Gas Authority of India Limited.
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