With the Centre developing cold feet on increasing diesel prices, the finance ministry may give in to the petroleum ministry demand for increasing the government’s share in petroleum subsidy. The government is clearly caught in a pincer grip: it cannot hike diesel rates with food inflation touching a 10-week high, nor can it ask FPO-bound Oil & Natural Gas Corporation (ONGC) to bear a higher share of subsidy.
Oil marketers get a reprieve - Business Standard
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The increase in the government’s subsidy bill could put the fisc under stress, since the government underestimated the petroleum subsidy in February. It provided for only Rs 3,108 crore for the current year in the Budget, but was forced to provide an additional Rs 14,000 crore on this account in the second supplementary demand. Though it draws comfort from the Rs 106,317-crore windfall from the auction of 3G and BWA spectrum, it has already spent Rs 74,401 crore more than the budgeted amount for 2010-11. Senior officials said Finance Minister Pranab Mukherjee cancelled Thursday’s meeting of an empowered group of ministers on fuel prices. He instead held a meeting with Petroleum Secretary S Sundareshan, who briefed him on the mounting burden of oil marketing companies (OMCs).Oil marketers get a reprieve - Business Standard
