An empowered group of ministers (eGoM) headed by finance minister Pranab Mukherjee will decide

RELATED ARTICLES BPCL, HPCL, IOC rally on petrol price hike HPCL, IOC gain on fuel price hike reports ONGC gains; Jefferies assigns buy call ONGC to foray into city gas, plans to set up ONGC Gas LIC sees marginal appreciation in ONGC investment till March

on deregulating diesel prices for retail consumers ahead of the proposed follow-on-public offers (FPOs) of ONGC and IOC, oil secretary S Sundershan told reporters here on Monday.

“We were hoping that crude prices will soften and there will be reasonable ground for passing small additional burden to consumers and going for deregulation of diesel. But unfortunately, crude prices have been constantly going up since June and it will be extremely difficult for the government to pass on the entire burden,” Sundareshan said at an industry conference.

“So when you say deregulation, all you are saying to pass on the burden to consumers. That is the call which the government has to take and we will take this matter to the eGoM soon,” Sundareshan added. He didn’t comment on an exact date when the finance minister-led eGoM will take up the diesel deregulation issue.

The country’s largest refiner, IOC, will hit the Street with its FPO in January. The government hopes to garner close to Rs 20,000 crore by selling a 10 per cent stake. At the same time, the government proposes to offload 5 per cent equity in ONGC in March. At the current market price of the ONGC scrip, the share sale will fetch the

government more than

Rs 13,000 crore.

However, oil secretary opined that freeing diesel price from the government control would not have much impact on the forthcoming public issues. “You cannot have absolute clarity on these matters. Reform is an on going process. We have moved very fast from where we were. The initial public offering of IOC took place when the entire market was regulated. So we have reached a situation where petrol is deregulated, and there has been increase in prices of diesel, LPG and kerosene. So, the market will have to take a view on it. You can’t have such decisions on absolute perfection,” the top bureaucrat in the oil ministry said.

Oil minister Murli Deora last week told parliamentary consultative committee that prices in the international market are again on the rise. “Currently, oil marketing companies are incurring under recovery of Rs 4.11 per litre on diesel, Rs 16.88 per litre on Kerosene and Rs 272 on every domestic cooking gas cylinder,” Deora said. The total projected under-recovery for 2010-11 is estimated to be nearly Rs 65,000 crores.