The Hindu Business Line : Govt to hold petrol, diesel prices till global trend stabilises

THE Petroleum Minister, Mr Mani Shankar Aiyar, on Friday indicated that the Government may revert to the earlier system of linking the domestic retail prices of petrol and diesel to import parity prices within a certain fixed band.

"We want the import parity prices to at least dictate the pricing, but within a certain band. We would like at least to get back to that system so that there is some element of competition between the public sector oil marketing companies and the private sector," he told newspersons after delivering the First Indian Oil lecture here.

The Minister, however, refused to give a time frame when this would be implemented. "It all depends on my prognostication about stability in the global oil market," he stated.

The Government, he said, will continue to hold petrol and diesel prices till international crude oil prices stabilise at a reasonable level.

Stating that there was never any dismantling of the administered price mechanism despite claims by the then Government in this regard, Mr Aiyar said: "The fact of the matter is that the oil marketing companies are acting within the ambit of what we ask them to do. I have told them to either increase the prices or not to touch the prices or reduce it as the case may be."

In his reckoning, the global crude oil prices are likely to stabilise around spring or summer this year as the US puts in economic policy to contain its run-away deficit.

"At that time we hope to at least get back to the system of revising prices within a fixed band," he said.

Mr Aiyar said public sector oil firms were still losing money on selling diesel, as domestic retail prices were higher than the cost. But the current petrol price was more than that of the international price and oil companies were making marginal profits on it.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page