The EGoM (Empowered Group of Ministers), led by the Finance Minister, is slated to meet on June 7 to take a decision on fuel pricing. The key issues that are likely to be discussed and on which a decision could possibly be arrived at are: (i) retail price hikes for the four regulated fuels (petrol, diesel, LPG, kero), (ii) deregulation of fuel pricing, and (iii) transparent mechanism of sharing of the overall subsidy burden.
What will be the likely outcome of this meeting on June-7th ?
Petrol pricing is fully deregulated, (ii) diesel price is partially deregulated (till, say, a pre-determined crude level) and a definite time-bound roadmap for its complete deregulation is implemented, (iii) LPG/kero prices are increased, albeit not to the full extent required, (iv) upstream subsidy share is determined through a graded, crude-linked formula, (v) OMCs are fully compensated for their marketing losses, (vi) GAIL is fully freed of sharing the subsidy burden
How and why is it different this time?
Finally, we believe things could be different this time because of: (i) better than expected revenues from 3G/BWA auctions, which have improved the government’s fiscal situation, (ii) crude having fallen to more comfortable levels, and (iii) the recent APM gas price hike pointing to the government’s willingness to implement reforms