Global trends force India to re-look at petro prices (Roundup)

May 23rd, 2008 - 2:03 am ICT by admin  

New Delhi, May 22 (IANS) As crude oil prices crossed $135 a barrel, the Indian government looked likely to take up Friday the issue of revising domestic petrol and diesel prices even as it dismissed reports of fuel ‘rationing’ and assured “uninterrupted supply” to the nation. “I cannot rule in or rule out anything at this stage,” Petroleum Minister Murli Deora told reporters here Thursday. He had last week categorically indicated there would be no hike in petro product prices.

The benchmark New York light sweet crude rose to a high of $135.09 per barrel, before climbing down. It had first gone through the $130 barrier Wednesday.

However, petroleum and natural gas ministry officials Thursday said a decision on the price of petrol and diesel was imminent, but refused to specify when.

“It can be any day and any moment,” said a senior ministry official, who did not wish to be identified.

The state-owned oil majors like Indian Oil, Hindustan Petroleum and Bharat Petroleum say they lose not less than Rs.2,000 billion in revenues on the sale of petrol, diesel, domestic liquefied petroleum gas (LPG) and kerosene at prices below the import cost.

“A hike of Rs.2 per litre in diesel and Rs.5 per litre in petrol will be quite reasonable. There is no option given the rate of crude oil in the international market,” the official added.

Late Thursday, neither Deora nor Finance Minister P. Chidamabram confirmed nor denied any cabinet meeting to discuss the price of petro products.

“I do not know if there would be any cabinet meeting Friday,” Chidambaram told reporters after he briefed them about Thursday’s Cabinet meeting.

Deora, who has called a meeting of the state-run oil companies, said petrol was being sold at a loss of Rs.16.34 a litre, diesel at Rs.23.49 per litre, LPG at Rs.305.90 per cylinder and kerosene at a discount of Rs.28.72 per litre.

A petroleum ministry statement released Thursday evening asserted that the government was “committed to maintaining uninterrupted supply of petroleum products to the consumers and has ensured the same even in the face of unprecedented rise in global oil prices”.

“The government and oil PSUs (public sector undertakings) have shouldered the maximum burden of the highly volatile world oil prices insulating consumers in India from the most of the impact,” it said.

“We are concerned at the financial health of the PSUs,” Deora noted again Thursday. He has been trying to convince the finance ministry to issue more oil bonds to cover a larger portion of the losses.

The government currently issues bonds for 42.7 percent of the oil firms’ losses, with another 33 percent coming from upstream oil companies.

Meanwhile, Deora dismissed media reports of rationing of fuel by Bharat Petroleum Corporation Limited (BPCL).

“I would like to plead with the public and consumers that there is no such move… The government is at work trying to solve the problems being faced by PSUs. There are some measures that are under discussions,” he said.

But, the statement mentioned the oil majors would take necessary measures to check diversion of fuel.

Deora also called upon people to report any case of misuse of fuel.

“He also urged that the wastage of petroleum products should be avoided and the tips to conserve fuels should be followed which will have triple benefits of lesser fuel bill, save oil - a heavily import based resource, lower emission for better environment,” said the statement.

Posted in Business |