India watchful as crude oil scales $78 per barrel
Monday, 17 July 2006, 19:30 IST
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NEW DELHI: The petroleum ministry and state-owned oil companies are keeping a close watch as escalating hostility between Israel and Lebanon pushed crude oil prices to a record high of $78 per barrel Monday, while Indian crude basket edged towards $75 per barrel. "We are keeping a close watch, a review on the impact of crude prices will be held at the month end," ministry officials said declining to speculate whether any possible hike at the retail end can be expected. Last month, the government had taken a decision to allow the Indian oil marketing companies to revise the retail prices if the basket of crude rises averages over $70 per barrel for the month. Ministry officials pointed out that the price of crude has been rising steadily this month. "From June 29 till July 12, the Indian crude basket had averaged $70.69 per barrel. Since then the crude basket price has risen to $73.96 per barrel on July 14 and during early trading Monday it crossed $75. A final picture will emerge only towards month end when we hold a review," sources said. Given the politically sensitive nature of the decision, it is still uncertain whether the state-owned oil marketing companies will finally be allowed to hike retail prices of petrol and diesel within less than two months of the last upward revision. Prime Minister Manmohan Singh had Sunday expressed concern about the impact of high global oil prices on India's economic growth and hoped that the problem would be collectively addressed at the G8 Summit of industrialized nations in St. Petersburg. "The spiraling oil prices are obviously a concern to every country and it is of equal concern to us," the prime minister said. "Instability in the hydrocarbon market reduces the chances of sustained economic growth of the global economy. Therefore, we would like to see a more predictable supply arrangement worked out at the global level so that the quest for energy security becomes a reality," he said. India depends on imports for over 70 percent of its domestic requirement.
Source: IANS
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