No revision in fuel prices, says Government

New Delhi, Sept 1: The government today said there will be no revision in prices of petrol and diesel alongwith other related fuels as the current oil price scenario does not warrant a tariff hike.

''No meeting for price revision took place today,'' official sources said.

The last hike by state-owned companies was on June 5. Petrol prices were raised by Rs 4 per litre and diesel prices were upped by Rs 2 per litre.

The government, however, did not increase the prices of kerosene and domestic LPG. The public sector retailers were given autonomy to raise prices when Indian basket of crude oil stays above a barrel for a month. Currently the Indian basket of crude is rading at 66.61 dollars a barrel.

"The trend of prices is falling," sources said.

Prices of petrol and diesel are unlikely to be hiked and the status quo is expected to remain as international crude oil prices have remained calmer than usual.

With the government deciding to issue oil bonds worth Rs 28,000 crore to meet its accumulated Rs 73,000 crore loss due to volatile oil prices, there is no possibility of price hike in the near future, sources said.

In other words, any hike in fuel prices, whether petrol or diesel, is not imminent, Petroleum Ministry official said.

However, the revision need not strictly be from the beginning of a month, but anywhere in the middle or at the end.

Meanwhile, Petroleum Minister Murli Deora has asked Finance Minister P Chidambaram to cut excise duty on petroleum, so that petrol and diesel prices may not increase owing to the impact of global oil rates.

The spurt in global crude oil prices implies a Rs 6.31 per litre hike in petrol, Rs 8.25 a litre increase in diesel, Rs 18.69 per litre raise in kerosene and Rs 166 per cylinder increase in LPG prices.

The Centre wants to pass on the least possible burden to consumers, but any duty relief should not hamper governments programme, Mr Deora said.

Petroleum Secretary M S Srinivasan said government had given freedom to public sector oil firms to revise petrol and diesel prices every month but they had not increased prices in line with rise in international prices.

The last hike by the state-owned companies was on June 5 as the compensation given to them in form of government oil bonds and assistance from companies, like ONGC has been found adequate to cover for the revenue loss arising from selling the fuel below the production cost.

The oil marketing companies have so far not effected any adjustments in prices since last price increase on June 6, 2005.

The Union Cabinet had, on June 5, raised petrol price by Rs 4 per litre and diesel by Rs 2 per litre and given autonomy to public sector retailers to raise prices when Indian basket of crude oil stays above 70 dollar a barrel for a month.

The average price of the Indian basket of crude oil at the last time of hike was 66 to 67 dollar a barrel. Even though the July average, stayed well over 71 dollar a barrel, public sector oil firms have decided not to pass on the surge on August 1, when the monthly revision was due.

''During current month (July-Aug), the Indian basket has averaged over 71 (dollar) per barrel,'' Petroleum Minsitry officials said.

Global prices had hit a record high of 78.40 dollar a barrel on July 14, two days after fighting erupted in Lebanon. Prices have steadily fallen after that week as supply fears abated after a ceasefire in Lebanon, and BP resumed partial production at its Prudhoe Bay oil field in Alaska.

UNI

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