No plans to hike fuel prices now: Reddy
PTI February 15, 2011The government has no plans to increase petrol and diesel prices even though international crude rates have touched $100 per barrel, Oil Minister S Jaipal Reddy said on Tuesday.
"We are not at the moment thinking of increasing prices," he said.
The spurt in international oil prices means that state fuel retailers will end the fiscal with around Rs 80,000 crore of revenue losses on selling diesel, domestic LPG and kerosene below cost.
"... the oil marketing companies are facing a burden of the order of Rs 80,000 crore (and) may be Rs 100,000 crore (this fiscal)," he said.
Even in case of petrol, whose price fixation was freed from government control in June last year, there is no proposal to raise prices just now, Reddy said.
State-owned Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum, who have raised petrol prices seven times since June last year, currently sell petrol at a loss of Rs 1-2 per litre.
"At the moment, there is no proposal on table of oil companies to increase price of petrol," he said, adding public opinion cannot be ignored even in free market.
Reddy said half of the revenue loss fuel retailers incur on selling diesel, domestic LPG and kerosene would be met by the government by way of cash doleout. Another one-third would be contributed by upstream firms like ONGC.
The rest will "somehow be digested by oil marketing companies," he said.
Oil Secretary S Sundareshan said of the Rs 46,000 crore revenue loss on fuel sales in the first three quarters this fiscal, the government provided Rs 21,000 crore and upstream firms contributed one-third.
Reddy said he hoped the Finance Minister will cut customs and excise duty on crude oil and products in the Budget to ease the burden of rising global oil prices.
Earlier, dedicating the Indian Oil Corp' naphtha cracker complex to the nation, he said the nation needs to find more oil to cut its reliance on imports to meet demand.
India currently imports 80 per cent of its oil needs.
The cracker, that produces raw material for making plastic, went on-stream in March last year but it was formally inaugurated only today.
Speaking on the occasion, Sundareshan said the nation's oil refining capacity will jump up to 240 million tonnes in the next two years from the current about 187 million tonnes.