With ruling UPA allies severely criticising the decision to hike petrol price by a steep Rs1.80 a litre, Petroleum Minister S Jaipal Reddy today defended the move.
With ruling UPA allies severely criticising the decision to hike petrol price by a steep Rs1.80 a litre, Petroleum Minister S Jaipal Reddy today defended the move saying it was necessitated by the fall in rupee, but said he was not consulted by the state-owned companies.
"There is no question of my government being consulted" before the second steep hike in as many months was announced yesterday, he said in an interview to a private TV channel.
"Oil companies are refusing to consult me... how do I consult anybody (before the hike is announced)," he said responding to a question on allies like Trinamool Congress (TMC) complaining that they are being taken into confidence before the decision.
Reddy said he would talk to West Bengal Chief Minister and TMC leader Mamata Banerjee on her unhappiness over the petrol price increase.
"She is a very valued colleague of mine in politics. She is one of the most respected leaders of UPA. I will talk to her," he said refusing to comment on her threat to walk out of the coalition over the price hike issue.
The minister said he "understands" and "appreciates" the anger of people against the fifth price hike this year. Oil companies had raised rates as crude imports became costlier because the rupee's value had fallen from Rs 46.29 to a US dollar to Rs49.40, he added.
Re one depreciation "means loss of Rs8,000 crore to state oil companies. For the full year, we are facing prospect of Rs24,000 crore loss merely on account of depreciation," he said.
He said the oil companies had merely "exercised their right to get full price of the production" by raising petrol price.
Reddy said he had inherited the government decision of June last year to free pricing of petrol from its control, when he took over as the Oil Minister earlier this year.
He refused to say if he endorsed the decision saying: "On such a sensitive question, I as a member of (Union) Cabinet I cannot give my personal answer."
Indian Oil, Bharat Petroleum and Hindustan Petroleum may end the fiscal with a revenue loss of Rs132,000 crore on selling diesel, domestic LPG and kerosene at discounted rates, he said adding ways to mitigate these losses have to be found.
"There is no proposal at all to increase price of LPG to full market level. Even in case of diesel and kerosene there is no proposal," he said.
Market pricing of diesel would mean a hike of Rs9.27 per litre in retail rates in Delhi while Rs260.50 increase in 14.2-kg LPG cylinder rates. Kerosene price would have to be raised by Rs26.94 a litre to make them at par with market.
With oil companies borrowing touching an alarming level of Rs129,989 crore, Reddy said he has sought a meeting of a high-powered ministerial committee to decide on the issue.
"I did seek a meeting of Empowered Group of Ministers to review the whole situation (of) oil marketing companies bleeding. They may not be able to get working capital loan from even Indian banks led alone foreign banks," he said adding each year these firm declare profits on dole outs.
Asked if he has proposed an increase in price of diesel or LPG, he said: "I am not saying that. I want EGoM to look at these figures. And the EGoM has representatives from all political parties and in that way EGoM does represent the political wisdom of the UPA."
"I will be taking the fact and not the solution," to the EGoM, he added.
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