Date:13/09/2008 URL: http://www.thehindu.com/2008/09/13/stories/2008091355921300.htm

National

No plan to cut oil prices now: Deora

Sujay Mehdudia

Indian crude oil basket falls to $95

Murli Deora

NEW DELHI: Even as the Indian crude oil basket fell to $95 a barrel Petroleum and Natural Gas Minister Murli Deora on Friday said there were no immediate plans to cut prices of petrol and diesel.

Talking to journalists after flagging off the relief materials for Bihar flood victims here, Mr. Deora said the continued fall in crude oil prices in the international markets was a welcome change from the high price regime. However, he said at present there was no proposal to cut fuel prices. Crude prices have slid to a six-month low of around $98 a barrel.

Further decline likely

Petroleum Secretary R. S. Pandey said expectations were that crude oil prices would slide further. “Over the last one and a half months, crude prices have come down from a peak of $147 a barrel. The Indian basket has touched an average $95.47 a barrel, which is a welcome relief. We expect prices to fall further, which would be the real relief,” Mr. Pandey said.

He said that if the crude oil prices remained stable and at current levels for the entire 2008-09 financial year, the extent of under-recoveries was estimated at Rs.1,62,254 crore. “But even this figure is very high,” Mr. Pandey added. Currently, oil marketing companies(OMC) are losing Rs.400 crore a day on the sale of petrol, diesel, domestic LPG and kerosene, down from last month’s Rs.450 crore a day.

Asked about compensation to OMCs, Mr. Pandey said that if the Indian crude basket touched $67 a barrel then there would be no subsidy for oil firms. “We will continue to watch the situation for some time. We are not thinking to increase fuel prices. The whole situation is regularly under review,” he said.