New Delhi: Petroleum Minister Ram Naik on March 7 indicated that prices of domestic cooking gas (LPG) may be revised after Finance Minister Jaswant Singh replies to the debate on Budget '03-04 in Parliament next week.

"His (Singh's) reply may contain provisions (on subsidies for LPG and public distribution system – PDS kerosene)… we will wait for it," Naik told a news conference.

Hike in LPG and kerosene prices have been necessitated due to lower Budgetary provision for subsidies on the two mass cooking medium.

Naik was hopeful that Finance Minister's Budget reply may contain provisions like lowering of excise and customs duty on petroleum products, which would be able to tide over the present crisis arising out of spiralling global crude oil prices.

"Whatever is needed (after the reply) will be done," he said in reply to a question if prices of LPG would be raised.

While the state-owned oil retailing companies have not revised LPG and kerosene prices since the last Budget in spite of crude oil prices rising from $ 19 a barrel to $ 32 per barrel, currently, they haven't even passed on the entire hike necessary in petrol and diesel.

"Petrol and diesel prices have not risen in step with spike in crude oil prices. Oil companies have adopted a wait and watch approach," he said while hoping that Finance Ministry would cut customs duty on crude oil and excise duty on petroleum products so as to avoid further increase in prices.

Allaying fears of disruption in crude oil supplies in the event of a war in Iraq, Naik said oil companies have stockpiled two months' supplies and have contracted enough supplies for a same period from countries beyond the conflict zone in the Middle East. "Contingency arrangements are in place. All possible situations have been accounted and we are ready to meet any eventuality," he said. Though the Budget shows a 40 per cent increase in subsidy outgo on kerosene and domestic LPG, the Rs 6300 crore provision for 2003-04 includes undisbursed subsidy element of Rs 2198 crore for the current year, official sources said.

The Finance Ministry had provided Rs 4,495.80 crore subsidy this fiscal, they said, adding subsidy on LPG has fallen from Rs 67.75 (for 2002-03) to Rs 46 per cylinder, while that of kerosene has fallen to Rs 1.64 per litre for the net fiscal from Rs 2.45 per litre, necessitating a hike in price.

State oil firms have together lost about Rs 3,200 crore during 2002-03 on selling LPG and kerosene below the cost. The Rs 67.75 per cylinder subsidy element provided this fiscal covers only half of the Rs 12 per cylinder gap between the artificially suppressed domestic retail price of Rs 241.20 in Delhi and actual average cost.

The total subsidy on LPG and kerosene for 2002-03 is close to Rs 10,000 crore, of which the government is reimbursing Rs 6,700 crore.

Even the last week's Rs 1.50 per litre increase in petrol and diesel prices was short of at least Rs three per litre hike needed in step with the surge in international oil prices, which are ruling at a 12-year high, sources said.

PTI