National

PM will be consulted on oil price hike: Naik

By Our Special Correspondent

NEW DELHI MAY 31. The Petroleum Minister, Ram Naik, today said that the issue of raising petrol and diesel prices as a result of hardening of world prices would be discussed with the Prime Minister, Atal Behari Vajpayee, and the Union Finance Minister, Yashwant Sinha, before a final decision was taken.

Giving no indication of when the prices would be raised, he said the public sector oil companies marketing petroleum products had enough profits to sustain losses. They had decided on their own not to increase the prices in the larger interest of consumers. He, however, conceded that the prices of petrol and diesel would have to be raised in view of the $ 5 a barrel rise in crude oil prices in the international market.

Speaking at an Oil and Gas Conference organised by the Tata Energy Research Institute (TERI), Mr. Naik said the Government wanted the dismantling of the administered pricing mechanism to take place in a smooth manner.

The Ministry is believed to be discussing a proposal to reduce excise duty on petrol and diesel as well as a marginal hike in prices of these products to overcome the problems being faced by oil companies since dismantling APM. The companies have already estimated that losses would have mounted to about Rs. 2000 crores by now as a result of the international prices of crude oil rising to about $ 25 a barrel. World prices were ruling at around $ 20 a barrel at the time of the budget when the announcement was made regarding dismantling of the APM by the scheduled date of April 1. Mr. Naik said the country had sufficient oil reserves to meet both the domestic consumer and industrial needs as well as the requirements of the armed forces.

Replying to questions, he said there were enough supplies to meet any eventuality. The country maintained a 60 days supply of crude oil and petroleum products.

All tanks were full and there should be no concern about stocks. There was about 45 days of petroleum product reserves in storage terminals and pipelines while crude oil was available to meet 15 days of refinery requirements. Naik said adequate steps were being been taken to provide security to all onshore and offshore oil and gas installations. The Coast Guard maintained vigil near refineries and exploration sites on the west and east coast. while the offshore defence advisory group including representatives of the western naval command, the Maharashtra Government and ONGC took care of the security of key Mumbai High offshore oilfields.

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