Date:13/01/2009 URL: http://www.thehindu.com/2009/01/13/stories/2009011355641100.htm

National

Fuel price cut likely in 10 days

Sandeep Joshi

NEW DELHI: The government is likely to cut the fuel prices in the next 10 days as the middle class and farmers have to be given maximum relief (from the steep drop in international crude prices), Minister of State for Petroleum and Natural Gas Dinsha Patel said at an international oil and gas conference (Petrotech) here on Monday.

“We have to reduce the fuel prices and we will do it at the earliest. It will happen in another 10 days or so, as some consultations with the Union Finance Ministry are needed. The middle class and farmers will be given the maximum relief,” Mr. Patel said.

He, however, refused to comment on the quantum of the reduction. “We have to consult the Finance Ministry on this. The amount of reduction will be decided at the appropriate level of the Cabinet.”

On Saturday, Petroleum and Natural Gas Minister Murli Deora said the government was working on a price cut and it would make an announcement within 10 or 15 days.

The government is likely to reduce the prices of petrol, diesel and LPG by Rs.5 a litre, Rs.3 a litre and Rs.25 a cylinder respectively, in view of the steep drop in international crude prices that are hovering between $35 and $45 a barrel for the past few months, against $147 in mid-2008.

The government cut the petrol and diesel prices by Rs.5 and Rs.2 last month after global crude prices fell to a four-year low. The oil companies are comfortably placed as far as their under-recoveries are concerned, thanks to the Indian crude basket that is now below $40 a barrel and a delay in cut in the retail fuel prices.