India stays stoic as oil prices touch record high

May 22nd, 2008 - 6:46 pm ICT by admin  

New Delhi, May 22 (IANS) India has not ruled out a possible fuel price hike, after international oil prices crashed through the $135 a barrel barrier in morning trade. “I cannot rule in or rule out anything at this stage,” Petroleum Minister Murli Deora told reporters here Thursday.

Only a week ago, Deora categorically indicated that there would be no hike in petro products’ prices, but the spiralling crude prices may have led to a change in heart.

Deora is also under pressure due to the losses suffered by the oil marketing majors, who sell petrol and petro products to Indian consumers at subsidised rates, leading to massive losses of about Rs 4.5 billion per day.

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

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

The petroleum ministry had sought the issue of oil bonds worth Rs.440 billion, amounting to 57.1 percent of the Rs.770 billion losses incurred by the state-run oil marketing companies during 2007-08. But, the finance ministry has so far rejected this proposal.

Meanwhile, the minister dismissed media reports of rationing of fuel by Bharat Petroleum Corporation Limited.

“There is no rationing of fuel as has been reported by one newspaper. We can never resort to such an anti-consumer practice. I have spoken to BPCL chairman Ashok Sinha, who has categorically denied such a move,” he said.

Deora said the oil marketing public sector companies were under sever financial strain, but fuel rationing was not contemplated to tackle the situation.

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

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.

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