The Hindu Business Line : PM concerned over rising crude prices

New CAG: The President, Mrs Pratibha Patil; the Prime Minister, Dr Manmohan Singh; and the newly sworn-in Comptroller and Auditor-General, Mr Vinod Rai, at the Rashtrapati Bhawan on Monday. —

Our Bureau

New Delhi, Jan. 7 The Prime Minister, Dr Manmohan Singh, has expressed concern at the increase in international crude oil prices.

“Steep rise in crude oil prices is a cause of concern. We have to look at various options open to us,” the Prime Minister said, when asked if the retail selling prices of petrol and diesel are set to be raised to partially offset the revenue losses suffered by the state-owned oil marketing companies (OMCs).

“We have to look at all possibilities existing. I would not like to comment on it,” he said.

The Prime Minister was responding to queries after the swearing in function of the new Comptroller and Auditor-General, Mr Vinod Rai.

A Group of Ministers (GoM) on essential commodities pricing, including fuel prices, headed by the External Affairs Minister, Mr Pranab Mukherjee, is likely to consider all possible options to curb the impact of rising oil prices on OMCs. The options include auto fuel price hike and duty cuts.

The GoM will hold its first meeting on January 17, the Petroleum Minister, Mr Murli Deora, said in Mumbai. The GoM was constituted by the Prime Minister in November 2007.

Global scenario

After touching the $100 a barrel mark recently, the international crude price has since softened. However, it continues to be above $90 a barrel. The Indian crude basket on Friday came down marginally to $94.41 a barrel after touching the all-time high of $94.62 a barrel. The state-owned refiners — Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation — are projected to lose Rs 69,753 crore this fiscal on sale of petrol, diesel, domestic LPG and PDS kerosene, as the Government has not allowed them to raise prices in line with the international prices.

Petrol is being sold at a loss of Rs 9.20 a litre, diesel at Rs 10.95 per litre, kerosene Rs 19.90 a litre and LPG at a loss of Rs 331.35 per cylinder.

While 42.7 per cent of the under-realisation suffered by OMCs is met by Government through issue of oil bonds and one-third by assistance from upstream companies — ONGC, OIL and GAIL — options for the balance one-fourth of revenue loss are being explored.