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Deora non-committal on fuel prices

Sujay Mehdudia

NEW DELHI: Even as Petroleum and Natural Gas Minister Murli Deora on Thursday sought an increase in the quantum of oil bonds issued to oil marketing companies, the government seemed to be indecisive on re-visiting fuel prices despite the Indian basket averaging around $58.93 a barrel.

Mr. Deora refused to say whether the government was reviewing the domestic LPG and fuel prices for the retail market notwithstanding his assurance to Parliament that his Ministry would “review the oil prices” within one week. On Thursday, he said the international prices were volatile and he could not say when the government would cut retail fuel prices.

The UPA government has come under increasing pressure from political parties including the Left and the BJP to cut fuel prices in view of the sharp decline in crude prices in the international market.

“I have given no assurance that fuel prices would be cut within one week, nor we are considering any kind of reduction in LPG prices,” Mr. Deora said. The government raised fuel prices in June when oil started testing new peaks above $130 a barrel in the international market. When the crude prices started softening, Mr. Deora said if the prices touched $67 the government would consider a revision of the retail prices.

However, when the prices were about to touch the $67 level, the government set a new benchmark of $61 per barrel for any cut. Since then, the Indian crude basket has touched $58 but the government has now taken the plea that a weak rupee eroded all gains of falling oil prices and no review would be possible till there was stability in the international crude markets.

On Thursday Mr. Deora met Finance Minister P. Chidambaram, seeking an increase in the quantum of oil bonds issued to fuel retailers to partly compensate their losses on account of selling fuel at below cost price.

Reduce prices: Swamy

Chennai Special Correspondent writes:

Janata Party president Subramanian Swamy has urged the Centre to immediately reduce the prices of petrol, diesel and kerosene following the downtrend in international oil prices.

In a statement here, Dr. Swamy said the current prices, which had been fixed when per barrel price of crude oil had shot up to $148, were yet to be rolled back even though the international oil price had fallen to $62 per barrel.

Dr. Swamy demanded slashing of the prices of petrol, diesel and kerosene at least by half in this scenario.

At present, taxes on fuel were only financing wasteful expenditure of the government and foreign speculators in the Indian stock market, he said.

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