New Delhi: India will consider cutting fuel prices only if the average cost of the crude oil it imports falls to $67 (Rs3,112) per barrel, oil minister Murli Deora said on Tuesday. US light crude for October delivery tumbled by as much as 4% to a seven-month low on Tuesday to about $92.5 a barrel. The average price of Indian crude oil imports was about $91 on Monday.
Backtracking? Petroleum minister Murli Deora. Hindustan Times
“We welcome reduction in oil prices but still public sector companies are losing money. The day when the prices fall to $67 per barrel, it can be considered,” Deora said.
“We are still subsidizing marketing companies,” said R.S. Pandey, secretary to the oil minister. “How can we reduce prices?”
Indian Oil Corp. Ltd, the nation’s biggest refiner, is losing Rs211 crore a day selling diesel and gasoline below cost, finance director Serangulam V. Narasimhan said on Tuesday. The company lost Rs218 crore a day in the previous fortnight, he said by phone from Patna.
The refiner is losing Rs13 for every litre of diesel it sells and Rs6.30 on a litre of petrol, said Narasimhan. Gains from oil’s decline have been offset by the rupee’s fall, he said. India imports 70% of its oil needs.
“The rupee depreciation.. has taken away all the benefits,” Narasimhan said. The rupee fell to 46.575 against the dollar, the lowest since 28 August 2006.
State-run refiners sell fuels below cost to help the government control inflation. They are partly compensated through bonds from the government and discounts from state-exploration companies.