The Hindu Business Line : Crude import bill may touch Rs 1,80,000 cr

IF the current trend of spiralling international oil prices continues, the crude oil import bill this fiscal is expected to touch Rs 1,80,000 crore, up from about Rs 1,20,000 crore in 2004-05.

The high international prices have added to the pressure on the Government to review the domestic pricing mechanism for the four petroleum products - LPG, kerosene, petrol and diesel.

International crude prices have been hovering around $64 a barrel in the last few days, while the India crude basket touched $58.83 a barrel on August 8.

Since domestic petroleum product prices have not been reviewed in tandem, the Government has been trying to equitably share the subsidy burden among the Government, the oil companies and the consumers.

But, sources told Business Line that the present trend required a rethink, adding that the Government could look at reducing tax on diesel and increasing the prices of LPG and kerosene.

The price of kerosene has remained unchanged since 2002, while the price of LPG was marginally increased in 2004 and the Government proposed to minimise the subsidy per cylinder by suggesting a hike of Rs 5 every month. However, this proposal was dropped owing to political pressure.

Petrol and diesel prices were last raised in June this year by Rs 2.5 and Rs 2 per litre, respectively. The sources also pointed out that the Government has provided a subsidy element of Rs 3,000 crore in the Budget for oil marketing companies, but if the current pricing pattern continues, these companies would suffer a revenue loss of over Rs 40,000 crore this year.

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