Oil Minister Dharmendra Pradhan on Monday said there was no question of going back on deregulation of fuel pricing despite the government asking state-owned firms to subsidise petrol and diesel by Re 1 a litre.
Speaking at The Energy Forum here, he said international oil prices touching a four-year high of $ 85 a barrel is a “challenge” that has resulted in fuel prices continuing to rise despite a one-off excise duty cut and public sector units (PSUs) subsidising fuel.
Pradhan said he had spoken to Saudi Oil Minister Khalid A Al-Falih and “reminded him of the June commitment of OPEC to increase production by 1 million barrels per day” to help cool prices.
“Maybe OPEC is not following the June decision,” he said.
The combination of high international oil prices and a depreciating rupee has made imports costlier, resulting in retail pump rates shooting up. Petrol price on Monday was hiked by 21 paise a litre and diesel by 28 paise.
This propelled petrol price in Delhi to Rs 82.03 per litre and diesel to Rs 73.82.
Pradhan said the decision to cut excise duty on petrol and diesel by Rs 1.50 a litre each and ask oil PSUs to absorb another Re 1-a-litre was aimed at “giving relief to consumers“.
On asking oil PSUs to subsidise fuel, he said the companies have taken the decision to “shield” consumers from high prices.
“This is not going back on deregulation. Fuel prices continue to be decided on a daily basis based on factors like benchmark international rate and foreign exchange rate,” he said.
Indian Oil Corp (IOC) Chairman Sanjiv Singh said the oil companies continue to have the freedom to change rates on a daily basis and the Re 1 a litre subsidy was a temporary move.
Pradhan said the centre had done its bit and now states should come forward and cut sales tax or VAT.
“Many states have done but some who were shedding only crocodile tears over high fuel prices havent,” he said without naming any state.
Petrol prices had hit an all-time high of Rs 84 per litre in Delhi and Rs 91.34 in Mumbai on October 4. Diesel rates too had peaked to Rs 75.45 a litre in Delhi and Rs 80.10 in Mumbai. Following the twin decision, they fell to Rs 81.50 per litre of petrol in Delhi and Rs 86.97 in Mumbai.
Diesel rates fell to Rs 72.95 in Delhi and Rs 77.45 in Mumbai on October 5.
After the centre cut excise duty by Rs 1.50 a litre and asked PSU oil firms to subsidise fuel by Re 1, Maharashtra and Gujarat governments were among the first to announce a matching Rs 2.50 cut.