New Delhi: Petroleum Minister Murli Deora today said there are no plans to cut fuel prices in immediate future, while terming the fall in global crude prices to the lowest in six months as a “welcome” change.
Crude prices are hovering near $100 a barrel level after hitting a six-month low of $98 on 11 September.
“I welcome this that crude prices have come down,” Deora told reporters here, however, he added that the government was not considering any fuel price revision at the moment.
Petroleum Secretary R S Pandey said that crude prices are expected to fall even further.
“Over the last one and a half months, crude prices have come down from the peak of 147 dollars per barrel. The Indian basket of crude reached an average $95.47 a barrel, which is a welcome relief. We expect prices to fall further, which would be a real relief,” Pandey said.
“If crude stays at current levels for the entire financial year of 2008-09, the extent of under-recoveries is estimated at Rs1,62,254 crore. But even this figure is very high,” Pandey said.
According to June data, estimated under-recoveries of state-run oil firms Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum stood at Rs2,45,305 crore. If crude prices stay at current levels, under-recoveries for the entire year are estimated to fall to Rs1,62,254 crore, Pandey said.
Currently, oil firms are losing Rs400 crore per day on sale of petrol, diesel, domestic LPG and kerosene, down from last month’s Rs450 crore a day.
When asked about compensation to oil PSUs on their under-recoveries, Pandey said, “If the Indian basket of crude touches USD 67 a barrel, then there would be no subsidies for oil firms.”
Pandey said the dual pricing policy is still being considered, although he refused to say when the matter would be taken to the Cabinet for approval.
If the policy is implemented, bulk users would be charged Rs22.20 more, he added.
Oil companies are projected to lose about Rs1,00,000 crore on diesel sales this year as the subsidised fuel is being increasingly used in industries for power generation.
We are considering dual pricing but it is very difficult to implement,” Deora had said a week ago.
The minister asked why should people who travel in luxury cars be sold subsidised diesel.
The Railways for one, which currently gets diesel at subsidised rates, may revolt if prices are raised. Also, monitoring petrol pumps that sell market-priced diesel to big cars will be difficult.