The eight-member EGoM is unanimous on bringing about market-linked prices for petrol, a fuel generally used by the well-off, but it remains to be seen if the Rs3.73 per litre hike would come into effect immediately or in two equal instalments
An increase in the rates of petrol and, possibly, diesel looks imminent with a panel of ministers set to meet tomorrow for deciding on the fuel pricing policy, reports PTI.
An Empowered Group of Ministers (EGoM) may go with oil minister Murli Deora's proposal to free petrol prices from government control, which would trigger a hike of Rs3.73 a litre, official sources said in New Delhi.
There was near-unanimity in the eight-member EGoM on bringing about market-linked prices for petrol, a fuel generally used by the well-off, but it remains to be seen if the Rs3.73 per litre hike would come into effect immediately or in two equal instalments.
However, sources said that freeing diesel prices was out of the question because the fuel was used by the transport and agriculture sector and, therefore, had close links with the inflation rate.
Railway minister (TMC leader) Mamata Banerjee and agriculture minister (NCP supremo) Sharad Pawar are said to be against decontrolling diesel rates, and the EGoM may settle for a nominal hike instead.
Diesel prices may be raised by Rs2 per litre instead of the Rs3.80 hike needed to make it market-linked, they said.
Also on the cards is a Rs25 per cylinder hike in domestic liquefied petroleum gas (LPG) rates and a marginal increase in kerosene prices, but these would have to pass the muster of Ms Banerjee and Mr Pawar.
The two party leaders, who provide crucial support to the United Progressive Alliance (UPA) government, had skipped the first meeting of the EGoM on 7th June. This led to the panel head, finance minister Pranab Mukherjee, postponing the decision.
Sources said that DMK leader and fertiliser minister M K Alagiri has agreed to an increase in auto fuel prices.
With global crude oil trading at below $80 a barrel, Mr Deora is seeing this as the last opportunity to usher in reforms in the sector which, otherwise, would need Rs74,300 crore in doles to bridge the gap between retail prices and import costs.
Freeing of petrol prices would reduce the Rs74,300 crore deficit by about Rs5,000 crore. A Re1 per litre hike in diesel prices would cut losses by Rs3,800-Rs4,000 crore.
Mr Deora had, on more than one occasion, briefed the prime minister Manmohan Singh and Mr Mukherjee on the crisis that would befall oil PSUs if no decision was taken in this regard.
But the UPA government seems wary of freeing fuel prices as such a move can add to the already-high inflation.
In May, WPI-based inflation provisionally entered double digits at 10.16%.
State oil firms currently lose about Rs215 crore per day on selling fuel below the imported cost. At present, petrol is being sold at Rs3.73 a litre below its cost, diesel at a loss of Rs3.80 per litre, kerosene at Rs18.82 a litre and domestic LPG at a discount of Rs261.90 on every 14.2-kg cylinder.
Manmohan Singh, who will head a high-powered Indian delegation to the two-day summit in Toronto, is expected to place on record India's opposition to such a banking transaction levy on the ground that Indian banks did well during the 2008 financial crisis sparked by weak regulation norms in developed countries
Prime minister Manmohan Singh leaves tomorrow on a three-day visit to Canada for attending the Group of Twenty (G-20) summit that will review the current status of the global economic recovery and discuss a tax to fund future bail out of banks, a proposal India is opposed to, reports PTI.
Mr Singh, who will head a high-powered Indian delegation to the two-day summit in Toronto on 26th and 27th June, is expected to place on record India's opposition to such a banking transaction levy on the ground that Indian banks did well during the 2008 financial crisis sparked by weak regulation norms in developed countries.
Notwithstanding the rejection of the tax idea at the G-20 finance ministers meeting in Busan in Seoul earlier this month, countries like the US, France and Germany, favour such a levy.
They are expected to pursue their demand in Toronto while the new British government has announced imposition of a banking levy in its first budget.
Besides India, countries like hosts Canada, Japan and Brazil have their reservations on such tax-funded bailouts.
Finance minister Pranab Mukherjee, who attended the Busan meet, said that the G-20 communiqué was a compromise because a section of the countries felt that there was no need of having any such taxation.
"If there are well-placed regulations that can take care of this problem the health of the banks can be protected," he said.
The other issue that may come up prominently in the summit is the demand for reforming the yuan, a demand China opposes strongly even though it has set in a process of flexibility that has seen the currency gaining marginally against the US dollar.
China says the summit leaders should look at ways to revive the global economic recovery and sustainable growth instead of concentrating their energies on a single currency.
The theme of the Toronto summit, the fourth since 2008 Washington meet called by outgoing president George W Bush to tackle the global financial crisis, is 'Recovery and New Beginnings'.
Its focus is expected to be on implementation of the previous summit decisions and review the current status of the global economic recovery and to chart future direction.
The leaders are also expected to address the framework for strong, sustainable and balanced growth, reform of international financial institutions, financial regulatory reform and reiterate the fight against protectionism.
Apart from G-20 leaders, including those of US, Britain, France and Germany, host Canada has also invited leaders of Spain, the Netherlands, Malawi (chair of the African Union), Vietnam (ASEAN chair) and representatives of UN, World Bank and IMF to the summit.
Arriving on June 26, the Indian prime minister will participate in a reception followed by working dinner by his Canadian counterpart Stephen Harper.
On Sunday, the summit opening plenary will be followed by other plenary sessions and conclude with a final plenary in the afternoon.
Singh will be accompanied by deputy chairman of Planning Commission Montek Singh Ahluwalia, his sherpa in the summit, national security adviser Shivshankar Menon, finance secretary Ashok Chawla and other officials.
On the sidelines of the summit, he will also meet US president Barack Obama and Chinese president Hu Jintao.
India will also be represented by the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI) at the B-20 summit of business leaders in Canada and youth leaders at the youth summit there.
At a bilateral level, Mr Singh will be meeting Harper in an engagement that is expected to give further impetus to the economic and other cooperation between the two countries.
They are expected to sign a deal providing for cooperation in the field of civil nuclear energy, paving the way for supply of uranium and cooperation in research, development, waste management and radiation safety.
A number of agreements and memoranda of understandings (MoUs) are under active negotiations and are likely to be concluded and signed during the visit. These include cooperation in social security, mining, higher education and culture.
Mines minister BK Handique said he is not in favour of any further disinvestment in Nalco, in which the government still holds 87.15% stake
After coal minister Sriprakash Jaiswal, mines minister B K Handique today raised dissent over the government's 25% public float norm and opposed further disinvestment in National Aluminium Company (Nalco), reports PTI.
Mr Handique has asked the finance ministry to exempt Nalco from a rule that requires all listed companies to have a minimum 25% public holding.
"We are seeking exemption for Nalco from this rule. We are not in favour of any further disinvestment in Nalco. The rule is not a mandatory rule," Mr Handique told reporters in New Delhi today.
Coal minister Sriprakash Jaiswal had said on Wednesday that his ministry will stick to 10% stake sale in Coal India Ltd and the decision of 25% disinvestment in listed public sector undertakings (PSUs) will not be applicable in case of the state-owned firm.
On Nalco, Mr Handique said the Navratna (title given to cash-rich firms) had sufficient funds to meet its requirements and its employees and management were opposed to any such move.
"In Nalco, its employees, management and local MPs are against any further disinvestment. Its hands are full. It is doing big projects. It has the requisite money," Mr Handique said.
This is set to cause further differences in the government as its various ministries seem to be on a collision course with the finance ministry on the minimum public float norm for listing.
The government, at present, holds 87.15% equity in Nalco, while the rest has already been made public. Its shares were trading at Rs434.50, down 1.9% as against the previous close on the Bombay Stock Exchange (BSE).
Earlier, the mines ministry had turned down a request from the finance ministry on further dilution of government's equity in the aluminium producer. Mr Handique had made it clear that the company does not need funds for the next two years.
Earlier, Orissa chief minister Naveen Patnaik had said that his party, the Biju Janata Dal (BJD), would oppose any move by the central government to disinvest Nalco.
The state-owned company reported a five-fold jump in its net profit to Rs391.48 crore for the fourth quarter ended 31 March 2010, as against the year-ago period. The company has cash reserves of about Rs4,300 crore.
As per the disinvestment plans, the union government intends to garner as much as Rs40,000 crore this fiscal by selling some of its equity in PSUs such as SAIL, Coal India, Engineers India and Hindustan Copper.