New Delhi, Jan. 4
THE Union Petroleum Minister, Mr Mani Shankar Aiyar, said on Tuesday that prices of petrol and diesel were unlikely to be cut in line with the falling international oil prices until the Union Government finalised a stable pricing regime.
"International market is volatile and we need a proper pricing policy," Mr Aiyar told reporters here, admitting that the UPA Government's two-month-old policy of fixing petrol prices at hundred per cent import parity and that of diesel at 50 per cent of the import parity has been scrapped. Petrol and diesel prices were freed from administrative control when the global prices were stable and not as volatile as in 2004.
"So import price parity cannot take place at the moment. Prices of petroleum products are not being fixed on the basis of import parity anymore," the Minister said, hinting that prices are unlikely to be revised in the near future.
Petrol and diesel prices have not been revised for six weeks, despite global fuel prices falling by $3-$4 a barrel. Such a fall would have normally warranted a cut of Rs 2-3 per litre in domestic retail prices.
Mr Aiyar said international oil prices had been rising for most of 2004 and had only started declining in the last two weeks. "So we will have to wait for prices to stabilise," he said.
The Finance Ministry had set up a committee under Mr Ashok Lahiri to look at restructuring duties on crude oil and petroleum products for insulating the domestic market from international price volatilities. The new pricing policy will be finalised only after the recommendations of the Lahiri panel is considered by the Government. This may be a part of the next Budget, since the report will have to be first vetted by the Committee of Secretaries before finalising the policy.