The Hindu Business Line : New system of petro price revision likely

THE Government has hinted that the existing fortnightly revision of petrol and diesel prices may be replaced by a new system that involves monthly or quarterly revisions.

Petrol and diesel prices, in keeping with the current practice of fixing prices on 1st and 16th of every month, are due for revision but may not be lowered in sync with the fall in international prices. "The mistake of September 1997 when the first step of dismantling the administered pricing mechanism (APM) was taken and that of April 2002 when the APM was dismantled will not be repeated. At that time, the steep fall in international prices and the spurt like that witnessed in 2004 was not taken into account. We have to consider all these volatilities for evolving a stable pricing policy," the Minister of Petroleum and Natural Gas, Mr Mani Shankar Aiyar, told reporters on the sidelines of the National Gas Conservation Programme here on Tuesday. Mr Aiyar was non-committal on whether the public sector oil firms will cut petrol and diesel prices in tune with the decline in international prices.

"When the prices rose, we did not raise (domestic prices) to the levels required. We want normal situation to prevail in the international market for us to evolve a stable pricing policy," he said adding that the UPA Government is averse to changing fuel prices frequently. According to estimates, diesel prices will have to be cut by over a rupee per litre and petrol price by 0.40 paise if domestic prices are to move in tandem with international markets.