AMITAV RANJAN Hike, Cuts & Bonds But Govt will push for Rs 3 & Rs 2 per litre for petrol and diesel, Rs 50 for LPG as it anticipates ally pressure. The government has, in principle, decided to increase prices of petrol by Rs 2 per litre, diesel by Re 1 per litre and cooking gas by Rs 20 per cylinder but will try and push for a higher raise at Saturday's Cabinet meeting.

Chief Minister Tarun Gogoi has called upon the Prime Minister Dr Manmohan Singh and Petroleum Minister Murali Deora to formulate a special compensation package for the Numaligarh Refinery Limited (NRL) to enable the refinery to tide over the crisis faced by it. In a letter to the Prime Minister, the Chief Minister also called for restoring 100 percent excise duty relief to the Refinery, which was reduced to 50 per cent in 2002.

A "mixed bailout package,' comprising a "moderate hike' in the prices of diesel and petrol and a re-adjustment in the customs duty on crude oil and the excise duty on the two fuels, was understood to have been "finalised' at a meeting between Prime Minister Manmohan Singh and United Progressive Alliance (UPA) chairperson Sonia Gandhi and some Ministers on Thursday evening.

Sanjay Jog The petroleum ministry has made a strong pitch for developing India as a refining hub. The sub-group on refining for formulation of the 11th Plan has assessed the supply-demand positions of petroleum products in the country up to 2011-12, along with prospects of product exports and projected a total refining capacity of 242 million tonne (mt) by 2011-12. This comes at a time when the government is tackling the issue of rising crude prices and its impact on oil marketing Companies (OMCs).

Bonds & Raising Prices Too On Agenda

RBI eases lending norms to oil companies. The government looked set to raise petrol and diesel prices by Rs 3-4 a litre and Rs 2 a litre respectively this weekend to curtail losses of state-owned oil firms even as the Reserve Bank of India extended them a helping hand by easing borrowing limits. Congress President Sonia Gandhi, who met Prime Minister Manmohan Singh in New Delhi this evening, is believed to have discussed the proposal for a retail fuel price rise that is being pushed for by the petroleum ministry.

THE fuel price imbroglio continued on Thursday even as crude oil prices held firm at around $130 a barrel. Prime Minister Manmohan Singh has now stepped in to take a final call on the price hike after the finance and petroleum ministries failed to reach a consensus on both the quantum of the hike and extent of duty reductions.

The finance ministry's proposal to seek compensation by way of cess on income and corporate taxes for any duty reduction on crude oil and motor fuels has put the ball squarely in the court of UPA chairperson Sonia Gandhi and PM Manmohan Singh. With finance minister P Chidambaram's meeting with oil minister Murli Deora ending in a deadlock on Tuesday, the top political leadership will now have to decide how to save the state-owned oil marketing companies from bankruptcy while cushioning consumers against a fresh burden in an electorally crucial season.

A cess or surcharge on income tax and corporate tax may be levied to bail out oil firms reeling under high global prices as the Petroleum Ministry's proposal to raise petrol price by Rs. 10 a litre, diesel by Rs. 5 a litre and that of LPG by Rs. 50 a cylinder finds few takers. The new proposal follows Finance Minister P. Chidambaram's reluctance to cut duties on crude oil and petroleum products unless alternative source of revenues are identified.

Deora meets Dr. Singh, seeks sharp hike to bail out OMCs Under-recoveries of OMCs could touch Rs. 200,000 crore this fiscal, Prime Minister told Stand-off between Petroleum, Finance Ministries figure in Manmohan-Deora meeting NEW DELHI: A crucial meeting of the Empowered Group of Ministers (EGoM) on petroleum has been convened for Wednesday to discuss proposals to hike the price of petrol and diesel, cut import duties on crude oil and lower excise on the two fuels.