The Hindu Business Line : Post-poll, no major hike in petrol, diesel prices likely

(From left) Mr R.V. Shahi , Secretary, Ministry of Power, Mr B.K. Chaturvedi, Secretary, Ministry of Petroleum & Natural Gas, and Mr C.P. Jain ,CMD , NTPC, at a conference in the Capital on Friday. — Kamal Narang

New Delhi , May 7

THERE will be no major hike in prices of petrol and diesel immediately after the elections, according to the Petroleum Secretary, Mr B.K. Chaturvedi. Even as the price of the raw material, crude oil, remains inflamed, Mr Chaturvedi said that a review to bring the domestic product prices in line with the international prices would be undertaken by the new government.

Recently, public sector oil marketing companies had written to the Petroleum Ministry seeking a raise in petrol prices by Rs 3 per litre and that of diesel by Rs 5 per litre in line with the international prices.

Global prices, which have crossed the $37-per barrel mark, owing to security fears and unrest in the West Asia region, is at a 14-year high and is inching towards the $40-mark.

"There will not be any such (significant) increase in petrol and diesel prices," Mr Chaturvedi told presspersons here on the sidelines of a conference on natural gas organised by the Confederation of Indian Industry.

Owing to the recent spurt in the international price of crude, the average cost of purchase of crude oil by the domestic refiners has touched the $35-mark. India now imports 70 per cent of its requirement of around 110 million tonnes. During fiscal 2003-04, the average cost of purchase of crude by the domestic refiners was $28 per barrel. Over the last one month, the average cost has gone up to $32 per barrel.

"The oil companies are reviewing (the spurt in crude prices) and they will take an appropriate action. The fear of any substantial increase in the prices is false," Mr Chaturvedi said.

Informally, the Cabinet in February decided to keep on hold any price hike till the elections are over, according to officials. Earlier, the Cabinet had decided to hold the prices of LPG and kerosene till March 31. In order to align with the international prices, LPG and kerosene retail prices would require to be raised by Rs 95 and Rs 5 per litre, respectively.

Mr Chaturvedi criticised the claims of oil companies that they were losing Rs 2,000 crore a month on selling petrol, diesel, LPG and kerosene at below cost.

"The oil companies, during the first three quarters of 2003-04 fiscal, posted an average 50 per cent increase in their net profits. If they were losing so heavily, then where have these profits come from," he said.