India's largest crude oil producer Oil and Natural Gas Corporation (ONGC) is on the verge of reporting "losses' on every barrel of crude oil that it sells due to the high subsidy burden that it

The government has increased petroleum products' prices, which will be effective for the fortnight, from March 1 to March 15. The petrol price has been raised from Rs 53.70 per litre to Rs 58.70, diesel from Rs 32.57 per litre to Rs 36.07, kerosene oil from Rs 35.23 per litre to Rs 38.73 and HOBC per litre from Rs 64.88 to Rs 69.88, a notification of Oil and Gas Regulatory Authority (Ogra) said. The oil prices in the international market showed a record surge during the last several months, which compelled the government to pass on partial increase to consumers, said a government spokesman. The petrol and HOBC prices have been raised by Rs 5.00 per litre, while prices of kerosene oil and light diesel oil have been raised by Rs 3.50 per litre. The spokesman further said the government will continue to provide a subsidy of Rs 16.82 per litre on kerosene oil and Rs 15.30 per litre on light diesel oil, after the price increase. The price computation is carried out by OGRA in accordance with the formula prescribed by the Federal Government. It requires that the price be based on average Arab Gulf prices for the last fortnight for Naphtha, Diesel, Kerosene and HSFO, to which Inland Freight Equalisation Margin (IFEM) is added, which reflects estimated transportation cost of the products to the 29 depots in the country for the purpose of price equalisation. Government levies viz. petroleum development levy and sales tax are added to notified prices. Copyright Business Recorder, 2008

The 5% reduction in freight rates for motor fuels announced in the Railway Budget is aimed at weaning away petrol and diesel traffic from road transport but will not result in any reduction in pump prices as the oil companies will save a mere Rs 50 crore annually due to the low volumes moved through rail. The new rate will bring down the cost of moving petrol and diesel over a distance of 100 km to Rs 172.40 per tonne from Rs 181. The rate for moving motor fuels over 1,000 km would cost Rs 1,184.40 a tonne against Rs 1,243.60. For a distance of over 2,000 km, the cost would come down to Rs 2,131.80 per tonne from Rs 2,238.40. The oil companies move less than 40% of the petrol and diesel consumed in the country by rail. The price build-up of petrol and diesel factors is a notional 50% of the prevailing rail freight. The 5% cut in rail freight will therefore not have an impact on the price build-up as the new freight charge would continue to be higher than what is accounted for in the price build-up. Following this 5% cut in freight on the two auto fuels, the railways hope to wean the petroleum cargo transport business away from roads. Oil firms move over 40% of the annual consumption of petrol and diesel through pipelines, the cheapest mode, and 20% by road.

Picking on an advertisement issued by the Petroleum Ministry to explain the recent fuel price hike, CPI(M) Politburo member and MP Brinda Karat wrote a letter to Petroleum Minister Murli Deora on Tuesday, questioning the Ministry's claim about the Government absorbing a financial burden of over Rs 71,000 crore during the current financial year. "I believe that the claim is not based on facts. In fact, the entire campaign launched by your ministry is misleading,' she said, seeking answers to a five-point questionnaire.

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Traffic on Sunday morning almost came to a standstill as Trinamul Congress activists today took to the streets, blocking arterial roads in several parts in the city, to protest against Centre's decision to hike the price of petroleum products.

AFTER several rounds of deliberations on raising auto fuel prices, the government finally decided to bite the bullet. Despite the Left's opposition it has raised petrol and diesel prices by Rs 2/litre and Re 1/litre, respectively, from February 15. The current price of petrol in Delhi is Rs 45.52/litre (from the earlier price of Rs 43.52/litre) and diesel is Rs 31.76/litre (from Rs 30.48/litre).

Starting today, the price of petrol will be dearer by Nu 1.87 and diesel by Nu 1.05, the first hike of the year. With the increased rate revised by Trade Department, the overall price of petrol rose to Nu 42.82 and diesel to Nu 31.77 in the capital. The price of liquid petroleum gas (LPG) and kerosene remains the same. According to trade officials, the rise was caused by the increase in the dealers' commission in India, due to an increase in the price of crude oil in the international oil market. Global crude prices at present have reached almost Nu 5,000 a barrel. Petrol and diesel prices last fluctuated in February 16 last year. As per trade records, the price of petrol and diesel last year was reduced by Nu 1.77 and 0.9 respectively, when crude oil cost around Nu 4,250 a barrel. In June 2006, the price of petrol increased by Nu 3.58 and diesel by Nu 1.91. Every year, Bhutan Oil Distributors and Druk Petroleum Corporation Limited import a minimum of 60,000 metric tonnes of petroleum products, including kerosene and liquid petroleum gas.