The Hindu Business Line : Petro prices set to soften

CONSUMERS can heave a sigh of relief with the oil marketing companies set to reduce the prices of petrol and diesel in line with the recent softening in global crude prices.

"I am happy that international crude prices have fallen. So, if the trend continues, on November 16, oil companies would revise petrol and diesel prices downward," Mr Naik told newspersons here today after inaugurating a conference of geologists here.

The Indian basket of crude oil has averaged $23.72 a barrel this month as against the average of $26.65 per barrel cost in the second half of October.

The prices were last hiked on October 16 when global crude prices were hovering in the $28-per barrel band. Immediately afterwards, crude prices began to soften with the abatement in tension on the US-Iraq front as well as rise in the crude inventory in US.

However, over the last month, oil-marketing companies have been earning profit on sale of petrol and diesel over and above the international product prices.

This has been partially offsetting the losses being incurred in the sale of kerosene and LPG. While kerosene prices have also softened, in the case of LPG, the losses are mounting since the global prices are not likely to drop before February when the winter season begins to retreat. In the case of LPG, the oil marketing companies are losing around Rs 150 crore per month. The Petroleum Ministry's efforts to push Finance Ministry into finalising the subsidy scheme for kerosene and LPG announced in the Budget this year has so far not yielded results.

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