Marking a red letter day for India's oil sector as the Empowered Group of Ministers (EGoM) on fuel prices took the first, big step in freeing up fuel prices. In a move that will instantly lead to a hike in petrol and cooking fuel prices, the ministerial panel has decided to free petrol from all price controls and allow it to be market-driven. Diesel prices will be hiked by Rs 2 a litre but will eventually be freed up as well. Kerosene prices have been raised by Rs 3 per litre and LPG will cost additional Rs 35 per cylinder. The move will help cut the government's huge subsidy bills, as will also be a huge relief to oil marketing PSUs which are burdened with staggering under-recoveries. Oil marketing companies (OMCs) have rallied hard on the back of this move gaining between 10-13%. Most OMCs chiefs express relief at the elbow room now given to them on prices.

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