Petroleum Minister Ram Naik categorically said that the Finance Ministry has agreed to share two-third burden of the Rs 236 billion oil pool deficit by way of reducing import and excise duties and issue of oil bonds, even as he reiterated that price hike of petroleum products to mitigate the remaining one-third portion would be done in next two days.

"The Finance Ministry has agreed to cut customs and excise duty on crude and petro products to provide relief to consumers from the impending hike in prices necessitated by the trippling of international crude oil prices in one and half years," Naik told reporters in New Delhi on Thursday. Finance Ministry has also said, "In-principle agreed on parting with Petroleum Ministry's Rs 44.29 billion deposits with the exchequer and issue of oil bonds for mitigating one-third of the oil pool deficit, estimated to touch Rs 236 billion during the financial year without any price correction". Naik, however, reiterated that the government will take the "hard" decision of hiking prices of five controlled products -- petrol, diesel, kerosene, LPG and Aviation Turbine Fuel (ATF) -- by September 30.
"Prices of petro products will be hiked to the extent of one-third of the oil pool deficit... we have ensured that only the least burden is passed on to the common man," he said adding his ministry has also initiated a move to cut upto 10 per cent petroleum product consumption by government machinery with a view to reduce non-plan expenditure on the product.

Bureau Report