Deora rules out reduction in petroleum prices
Tuesday, 30 September 2008, 07:00 Hrs
Jaipur:Prices of petroleum products are not going to be reduced as of now, the government said here Tuesday. Addressing a press conference, Petroleum Minister Murli Deora ruled out a downward revision in prices, saying international petro-products prices were still very high despite falling in recent times. "For the oil industry, current times are surely both challenging and demanding. The high global crude oil prices, over the last two years in particular, have had an impact both on the national economy and at the individual level," Deora said. "Despite the fall in international prices, the under-recoveries of the OMCs (oil marketing companies) are still very high. The projected under-recoveries on sale of petroleum products for 2008-09 are now estimated at 171,000 crore (1,710 billion)," the minister said. Maintaining the financial position of the OMCs continued to be a matter of concern, Deora said: "The losses which our Navratna OMCs are incurring is unprecedented in their history." International crude prices have softened recently - Brent crude was quoting $93.86 a barrel Tuesday, compared to over $145 mid-July. But in India, Deora said, the retail prices of auto fuels and LPG are pegged at global crude price levels of $67 a barrel. "We can only think of lowering petroleum products prices when international prices of crude touches around $67 a barrel." At the same time, the minister the government would make every effort to insulate people from the volatility of global crude oil prices. Citing the example of kerosene, Deora said the government has ensured the commodity was supplied at 9 a litre, cheaper than a bottle of mineral water at 12 a litre. Describing diesel as the "backbone of India's economy", he said 19 percent of its consumption was by the agriculture sector, the mainstay of India's food security, other than the transport and industrial sectors. The minister said the government spends about 1,000 bilion annually to keep diesel prices below the market price, and subsidise the under-recovery of the fuel.