Customers intending to buy diesel passengers cars may have to fork out more cash.

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Oil minister S Jaipal Reddy on Wednesday said he has suggested finance minister to raise taxes diesel passenger vehicles users.

“We cannot introduce dual pricing (for diesel). It is not practical,” Reddy said at the economic editors’ conference in national capital on Wednesday.

In September, 2,18,170 passenger vehicles were sold. Out of this, nearly 40 per cent (87,268) were diesel vehicles. State-run oil marketing companies – IOC, BPCL and HPCL – sell every litre of diesel at Rs 6.61 per litre below market cost. The total loss incurred by these companies on selling subsidised diesel amounts to Rs 67,000 crore, the cabinet minister said.

“We are a net oil importing country. For first time in history, international prices are ruling so high and continuing for weeks…earlier I said that fuel prices would come down if brent crude oil price goes below $ 100 per barrel. But, fuel prices cannot be reduced now as rupee has depreciated,” Reddy explained. “Every rupee deprecation against dollar means an outgo of Rs 8,000 for the oil sector.”

The under-recoveries of the OMCs for the year 2011-12 are now projected to be Rs 1,21,571 crore. “Oil companies are able to ‘declare’ profits because finance ministry has given subsidy. Financial condition of oil PSUs is fairly fragile. We have requested finance ministry for substantial support. In the first quarter, finance ministry have given Rs 15,000 crore,” Reddy added.

At the same time, oil minister has said that there is a proposal to cap the number of subsidised domestic cooking gas cylinder for every customer. “eGoM is yet to take a view. On account of selling subsidised cooking gas, oil companies are losing Rs 25,000 crore in a year. It is a politically sensitive question. Until, we persuade people, we cannot take such decisions,” Reddy said.

(With inputs from Saahil Anant)