25 Nov : The government will cut petrol and diesel prices after Assembly elections are over on 24th December since the fall in international oil prices will result in lower revenue loss on fuel sales this fiscal.
"The international prices have fallen and there is an expectation that prices need to be reduced. I am also of the opinion that they should be reduced and that will happen after December 24," Deora said.
Based on the average international oil prices in the first fortnight of November, state-run firms are earning a margin of Rs 16 crore per day on petrol and Rs 5 crore a day on diesel.
However, they continue to lose on kerosene sold through ration shops and domestic LPG.Kerosene is being sold at a loss of Rs 22.40 a litre and LPG at Rs 343.49 per cylinder.
The fall in international oil prices will result in lower revenue loss on fuel sales this fiscal.Petroleum Secretary R S Pandey said the ministry would go to the Cabinet Committee on Economic Affairs (CCEA) with a comprehensive proposal highlighting the situation and the remedial steps that can be taken.
The issues to be highlighted are that prices of petrol and diesel can be revised in view of the profits made by the state-run oil firms on petrol and diesel since 1st November, 2008.
However, the combined net loss of over Rs 14,000 crore incurred by oil companies on fuel sales also needs to be taken into account.
"Thirdly, as per our calculations, there will be an under recovery of Rs 1,10,000 crore on sale of fuel this fiscal. In what form these need to be covered will also be flagged with the CCEA," Pandey said.