Petrol price hike decision by March end: Indian Oil

New Delhi: 

Indian Oil Corporation (IOC), the country's biggest oil marketing company, has told NDTV Profit that petrol prices may be hiked by the end of March.

"We will look at reviewing petrol price by end of March," Chairman and Managing Director of IOC RS Butola told NDTV Profit. However, a decision will be taken after considering the paying capability of the consumer, Butola added.

"We have told the government under recoveries are very high. This is beyond the ability of oil marketing companies to absorb," Butola said.

The government had decontrolled petrol price in June 2010 but diesel and domestic LPG are subsidised.

State-owned oil companies have been pushing for raising petrol prices since the assembly elections ended. Oil firms had last revised petrol prices on 1 December after which rates have not been changed because of Assembly elections in states like Uttar Pradesh.

Indian Oil, Bharat Petroleum and Hindustan Petroleum together have lost over Rs 2,000 crore since the last revision which was done at international gasoline price (the benchmark for deciding domestic retail rates) of $ 109 per barrel. Brent crude for May delivery was up 17 cents at $123.31 per barrel in London yesterday.

"We have asked for 100 percent reimbursement. If we are not given this, we will have to consider passing on the burden to consumers," Butola said.

The current under recovery, which is the gap between the local price of fuel and global prices, on petrol stands at Rs 6.43 per litre. OMCs currently lose Rs 14.73 a litre on diesel, Rs 30.10 a litre on kerosene and Rs 439.50 per LPG cylinder.
"Petrol prices will be dealt with independently by our ministry but before we instruct the oil companies we will have to take all matters like undue volatility in the world market into consideration," Oil minister S Jaipal Reddy told NDTV Profit.

An increase in fuel prices is necessary to cut down government's subsidy payout as state-owned oil firms are projected to lose Rs 200,000 crore on selling fuel below cost next fiscal. As per present policy, the government will have to make good half of it by way of cash subsidy.

In the current fiscal, the government has provided Rs 65,000 crore in fuel subsidy, which it hopes to trim down to Rs 40,000 crore in 2012-13. It targets to bring down the subsidy bill to below 2% of GDP in FY13.

(With inputs from agencies)

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Akhilesh defends decision to induct Raja Bhaiyya in cabinet

New Delhi:  New UP chief minister Akhilesh Yadav, who has been feted for trying to keep away people with dubious antecedents from the Samajwadi Party as he fought a winning battle for UP, will find himself having to repeatedly explain the induction of Independent MLA from Kunda, Raghuraj Pratap Singh or Raja Bhaiyya, in his cabinet.

Raja Bhaiyya, the local strongman of Pratapgarh, has known criminal antecedents; today, after taking over as UP CM, Mr Yadav defended his minister accusing his predecessor Maywati of filing false cases against Mr Singh. The 42-year-old Raja Bhaiya has been a minister before in a Mulayam Singh Yadav government. But that government had not come to power promising to rid UP of goonda raj and law and order problems. Akhilesh Yadav's did.

The MLA was arrested in 2002 on charges of kidnapping and was later jailed by the then Mayawati government under the Prevention of Terrorism Act (POTA), charges which were dropped the moment Mulayam Singh Yadav came to power in 2003.

In 2004, a police officer alleged that Raja Bhaiyya was targeting him for vendetta. Later that year the police officer died in a road accident. The CBI is investigating that death.

All this has not stalled Raja Bhaiyya's political career; he has won elections from Kunda a record five times as an Independent since 1993, when he first contested. His association with the SP has always been strong. He was made minister in 2005. When the BSP was winning all over UP in 2007, it could not dent the Raja Bhaiyya fortress of Kunda. This time, the SP did not field a candidate against him and before the elections he declared that the party would sweep UP. When it did, he expectedly threw in his lot with it.

Mr Singh belongs to a well-known UP family. His grandfather Raja Bajarang Bahadur Singh was the founder vice chancellor of Pant Nagar University and was later also governor of Himachal Pradesh. His father Udai Pratap Singh was educated at Doon School.

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Cabinet defers decision on presidential reference to Supreme Court on 2G cases

New Delhi:  The Cabinet today deferred a decision on the presidential reference to the Supreme Court on the issue of telecom licences in view of the court's verdict in the 2G scam case. In a meeting that lasted nearly two hours this evening, the Cabinet decided that Solicitor General Rohinton Nariman will brief it on the presidential reference and the Cabinet will only take a final decision after the Solicitor General's briefing.
In January, the Supreme Court cancelled 122 licenses granted in 2008 by then Telecom Minister A Raja for mobile network licenses and accompanying second generation or 2G spectrum; the two judges who delivered the verdict said all national resources must be distributed only through an auction. The licenses revoked by the court had been allocated on a first-come-first-serve basis by A Raja and the judges said this policy was "fundamentally flawed" partly because it presented an advantage to anyone with access to the "corridors of power."
The government has said that while it in no way challenges the verdict of the court, it needs answers on how natural resources should be distributed hereon. The Prime Minister had in February sanctioned a Presidential reference on the matter - which means that the government will formally request President Pratibha Patil to ask the Supreme Court if its order applies to all natural resources.
NDTV has learnt that these are the seven questions that the government is likely to pose to the Supreme Court through the presidential reference:
1) Whether licenses, other than the ones auctioned, were granted illegally?
2) Were all licenses granted on a first-come-first-served basis, upto 2007 granted illegally?
3) If yes, then what steps should be taken by the government to deal with those licenses?
4) If no, is the Government of India obligated to ensure a level-playing field in granting licenses and whether it is required to withdraw spectrum allocated to all existing licenses? Also, should it be with retrospective effect and be charged and at what price and what date?
5) Is dual technology licences illegal and is the government of India required to make a level-playing field and withdraw all spectrum allocated to licensees in 2008? Should they be charged, and at what price and from what date?
6) Does the 3G spectrum auction allotted in 2010 to entities whose licenses have been quashed in the judgement referred to in the above stand withdrawn?
7) Is allocation of spectrum through auction the only legitimate mode even when it is inadequate or there is no competition?
The President can, under Article 143 of the Constitution, refer matters of public interest to the Supreme Court.  The Supreme Court will then set up a bench of either three or five judges to provide clarifications requested by the President. These judges could talk to parties involved with the case or to experts; regular hearings will be held before they share their conclusions. 
The last time such a presidential referral was made was in 2004 for a dispute between Punjab and Haryana over water-sharing.
The 122 licenses that were cancelled in January are at the heart of what's believed to be India's biggest scam. As Telecom Minister, Mr Raja, now in jail for over a year, allegedly granted sweetheart deals to companies who conspired with him - not only did he give them licenses at throwaway prices, but the spectrum they needed was free. Many of the executives of these companies were arrested last year and spent several months in jail before being granted bail.

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