The Hindu Business Line : `Review on oil prices only next month'

Rising concern
The price of Indian basket of crude oil touched an all-time high of $72.75 a barrel on Thursday.
The country's 73 per cent of the crude oil requirement is imported.

New Delhi , July 14

Despite international crude prices flirting at around $ 78 a barrel, any increase in domestic retail prices seems to be some way off. Senior officials of the Petroleum Ministry today said that while the situation was continuously under watch, any consideration of revising domestic prices would take place only next month.

"The consideration on petroleum prices is to take place on monthly basis so wait till August 1 when we will review the situation. Today is just the 14th day of July, so wait till the month-end," the officials said.

The price of Indian basket of crude oil touched an all-time high of $72.75 a barrel on Thursday. The average price in July so far for the Indian basket has been $71.11 a barrel compared with the June average of $66.80.

In June, while allowing a petrol and diesel price hike, the Government had decided to give public sector oil marketing companies the flexibility to raise prices if the average monthly Indian basket oil prices top $70 a barrel.

New pricing scheme

For the new pricing scheme to come into effect, the average has to stay above $70 for the full month, the officials said. Even if the average of two months is taken together or a one-month average after the last revision of petroleum products, the situation may not warrant a revision, the officials maintained.

The Indian crude basket comprises Oman-Dubai sour grade crude and Brent dated sweet crude in a 58:42 ratio. The country's 73 per cent of the crude oil requirement is imported.

International crude oil rose for a fourth day on Friday on concerns over the developing situation in West Asia and unrest in Nigeria, the largest oil exporter, on fears of supplies cut off. Israel's air force struck targets in Lebanon for a third day on Friday.

Crude oil for August delivery rose 2.2 per cent, to $78.40 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $77.23 at 11:52 a.m. in London (Friday), about 28 per cent rise so far this year.

Last month, the Government had raised retail prices of petrol and diesel by Rs 4 a litre and Rs 2 a litre, respectively. For every dollar rise in prices for a barrel of crude oil in the global market, local retail price per litre of petrol has to be increased by 39 paise, that of diesel by 30 paise, kerosene by 36 paise, and cooking gas by 67 paise.

Despite the price hike on June 5, the oil marketing companies continue to lose Rs 6.50 per litre on petrol, Rs 8 a litre on diesel, Rs 7 per litre on kerosene and Rs 135 per cylinder on cooking gas.