New Delhi: Consumers may feel the pinch of higher fuel prices in the coming months as the government is considering a proposal to allow oil marketing companies to charge a premium on retail prices of petrol and diesel to recover their investment in producing less polluting fuel.
Public and private sector oil marketing companies (OMCs) have appealed to the petroleum ministry to support a plan to raise consumer prices of auto fuels to help them recover a portion of investments made in upgrading their refineries to produce BS Stage-VI fuel.
If this proposal is accepted by the government, retail prices of petrol and diesel would come at a premium of about Rs 0.80 a litre and Rs 1.50 a litre, respectively for the next five years much to the discomfort of consumers.
The global oil market has largely remained flat for the past several months due to slower demand. This has also resulted in retail prices of petrol and diesel being cut by OMCs on numerous occasions in the past few weeks. But if a premium charge is allowed, retail fuel prices would not reflect the global pricing trend but would remain artificially higher at all times.
“Allowing an increase in retail prices of petrol and diesel is one of several options that we have to cover for the incremental investment made in upgrading our refineries. We have approached the petroleum ministry with a complete plan on cost recovery and awaiting a direction,” said a senior executive of a private sector refiner who asked not to be named. (IANS)