The Hindu Business Line : Govt studying impact of global crude price fall

With the international crude prices hovering below $60 a barrel, the Petroleum Ministry is examining the impact of global prices on domestic retail prices of petroleum products.

The Minister for Petroleum and Natural Gas, Mr Murli Deora, told newspersons, "We are studying the impact of fall in international oil prices. We will be very happy to reduce prices, if possible."

Asked whether the domestic retail price of petrol and diesel could be reduced in-line with the fall in global prices, he said it remained to be examined as to what extent the fall in international prices had helped the domestic market.

The Indian crude basket averaged at $57.27 per barrel in October, and the average of first four days of November stood at $56.32 a barrel. The crude basket on Friday stood at $56.20 a barrel.

To offset the impact of international crude prices on the state-owned oil marketing companies for selling petroleum products below the cost price, the Government had in June raised the price of petrol and diesel by Rs 4 and Rs 2 per litre, respectively, when the global prices were over $72 a barrel. The prices of cooking gas and kerosene sold under public distribution system, however, remained untouched.

Now with the crude basket hovering below $60 a barrel, the Minister said there was a need to have a look at the estimates of possible revenue loss to retailing companies. ``The contribution to be made by upstream companies, bonds and other measures to bridge the gap between oil prices and domestic retail prices will also be examined,'' he said.

Oil retailing companies are making Rs 4.50 per litre profit on petrol, but continue to lose Rs 1.55 per litre on diesel. They are losing close to Rs 200 on sale of every 14.2 kg LPG cylinder and another Rs 16.66 on every litre of kerosene.