Indian fuel prices should match global rates: official

February 15th, 2008 - 10:53 pm ICT by admin  

New Delhi, Feb 15 (IANS) Petroleum Secretary M.S. Srinivasan Friday called for mobilising public opinion in favour of a regime whereby Indian consumers pay fuel charges prevailing in the international market. Speaking at a conference organised by the Federation of Indian Chambers of Commerce and Industry (Ficci), Srinivasan said the government’s unwillingness to raise fuel prices to global levels would harm the oil industry in India.

Referring to the huge gap between the fuel prices prevalent in India and the world, he said: “If these distortions continue, the oil industry in India will collapse. The oil industry has to be financially viable.”

He warned that the government’s interference in oil pricing would drastically affect India’s energy security. “It will then be like any other sick industry,” Srinavasan said.

He said that 20-25 percent of crude oil prices accounted for speculation.

“These prices go up owing to pressures from short-term money players. That is why crude oil prices are going out of control.”

Stating that the oil industry was undergoing a major transformation, he said petroleum extraction in India would go up by 40 percent in the next five years while the gas segment was expected to see a 150 percent growth.

“You will also see a nationwide network for gas in the country in the next five-six years,” the petroleum secretary added.

Srinavasan said that public transport across the country would use “gas-based fuel” in the near future.

Other speakers at the conference also expressed fear over erosion of knowledge base in the petroleum sector.

“In the next few years, more than 50 percent of petroleum engineers will retire. We will have to generate a new lot of experts in (petroleum and gas sectors) to keep things going smooth,” said Vikram S. Mehta, chairman of the Shell Group of Companies.

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