No immediate cut in transport fuel prices: PM

November 11th, 2008 - 2:51 pm ICT by IANS  

New Delhi, Nov 11 (IANS) Prime Minister Manmohan Singh has ruled out any immediate cut in the prices of transport fuels since state-run petroleum retailers continued to incur losses.”There are limits to what the government can do on subsidising,” the prime minister told reporters onboard Air India One, on his way back from the two-nation Gulf visit late Monday.

“When we see that the Indian oil companies are able to sustain a reduction, that will be the right (time for such a) decision,” he said after his maiden visits to Oman and Qatar.

“Oil companies have to bear a very heavy burden due to the subsidies,” he said, adding: “If industry believes this is necessary, we will look into it.”

Opposition parties have demanded a cut in prices of petrol and diesel, arguing that international crude oil prices had come down now from a high of $147 a barrel in July to around $60 a barrel last week.

But the petroleum ministry says that since India imports 70 percent of its oil needs and pays for the same in dollars, the depreciation in the value of the rupee has kept the import bill high.

Indian Oil Corp, the country’s largest oil marketing company, reported a loss of Rs.70 million in the second quarter of this fiscal and urged the government to compensate it fully for the losses incurred for retailing fuels below cost.

Together, the three state-run oil retailers have posted a net loss of Rs.128.78 billion for the second quarter. While Bharat Petroleum Corp announced a net loss of Rs.26.2 billion, Hindustan Petroleum Corp reported a net loss of Rs.32.18 billion.

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