Cabinet to decide fuel price cut, as Deora gets notice for remarks (Intro Roundup)November 26th, 2008 - 7:44 pm ICT by IANS
New Delhi, Nov 26 (IANS) With state-run oil companies making profits on the sale of petrol and diesel, the petroleum ministry will seek a nod from the cabinet to revise prices, a top official said Wednesday, even as the Election Commission sought an explanation from Petroleum Minister Murli Deora for his remarks on price cuts a day earlier.”We will go to the cabinet with a comprehensive picture,” Petroleum Secretary R.S. Pandey told reporters at the Economic Editors Conference here, even as his minister Murli Deora declined comment on the subject.
“Revision does not necessarily mean a cut but it is true that in some items we are making a profit,” Pandey added.
“From $147 per barrel a few months back, (crude) prices have started declining and today it is under $50 per barrel. Therefore, everybody is wondering why prices are not being revised downwards.”
Deora had Tuesday said the government will cut prices of fuels after the polling is over for state assemblies next month, inviting criticism from opposition parties of violation of the election code of conduct.
“The international prices have fallen and there is an expectation that prices need to be reduced. I am also of the opinion that they should be reduced and that will happen after Dec 24,” Deora had said.
Following complaints by both the Bharatiya Janata Party and the Left parties, the Election Commission issued a notice to the petroleum minister Wednesday, seeking an explanation over his remarks.
At the conference, Deora was also specifically asked if he had written a letter to Congress party president Sonia Gandhi, assuring her that prices of fuels will be cut next month.
“I have no reply to this question - whether I have written a letter to somebody or not written,” he shot back. “These are the things which I would not like to discuss here.”
Pressed further, the petroleum secretary came to his minister’s rescue. “You can’t anticipate today what the government will decide,” he said.
“When the government decided to increase the price by Rs.2 or Rs.5 per litre in June, even then there was substantial under recovery. So at what level of under recovery the government will feel comfortable should be left to the government.”
According to Pandey, out of four products where the government was controlling prices, state-run oil marketing firms were earning a profit of Rs.8.17 per litre on petrol and 65 paise per litre on diesel.
But on cooking gas, there was still a loss of is Rs.330.20 per cylinder, while for kerosene the loss amounted to Rs.21.54 per litre.
He said even on the prevailing price level, state-run oil marketing companies were having to contend with a loss of Rs.1,100 billion, despite a fall in prices of crude oil from a high of $150 per barrel to under $50 now.