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Updated: August 22, 2010 10:05 IST

Petrol prices set to rise again

Sujay Mehdudia
Comment (4)   ·   print   ·   T  T  
The Hindu

“There's fear that if it's done now, there will be an uproar in Parliament”

Despite an uproar by Opposition parties inside and outside Parliament, the Petroleum and Natural Gas Ministry is likely to undertake a further, but minor, hike in the prices of petrol after the conclusion of Parliament's monsoon session in the first week of September.

Officials sources said here the recent spurt in international crude oil prices had not helped the situation and the Oil Marketing Companies (OMCs) were losing around 50 paise to Re. 1 per litre on petrol. The average crude oil basket is around $81 per barrel and shows no signs of moderating.

“We are looking at the situation closely and will review the price line in the first week of September. There is a fear that if it is done now, there will be an uproar in Parliament,” a senior official remarked.

After it decontrolled petrol prices on June 25, the government contemplated issuing guidelines to the OMCs for adjusting the price of petrol against the movement of crude oil price in the international market. However, those guidelines are still to come. The State-owned OMCs — Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited — are likely to raise petrol prices by at least Re.1 per litre by early next month. A hike is imminent to keep the mounting under-recoveries under control.

“Petrol price hike is imminent. Only the quantum of increase will have to be decided. At the beginning of this month, under-recoveries on petrol stood at 50 paise per litre, which has now gone up to Re. 1. This is something that OMCs now want to pass on to the consumers under the new pricing regime.”

Global crude prices have been rising for the past few weeks on hopes of recovery in energy demand. Crude price for September contract on the New York Mercantile Exchange is trading around $82 a barrel.

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There is no need to increase Petrol prices since the crude oil prices have only gone down since the day the prices were raised earlier. It was around 79 dollars a barrel when the Petrol prices were raised last time. Now its only 73.92 dollars ( The prices have been hanging only in the 70's and its been only going down in the recent past.Government seems to be keen on increasing the price of Petrol to take care of the losses in Diesel, Kerosene and Cooking Gas. Why Petrol consumers should subsidise other consumers?

from:  N.Ramesh
Posted on: Aug 22, 2010 at 06:29 IST

I have no idea what the public in India believes about petrol pricing, but one has to be aware that the price paid at the pump must cover the cost of crude, processing costs and a profit for the oil company and for the retailer in order for supplies to be steady and reliable. So far the oil companies' losses seem to have been covered by grants from the Government, but this reduces the resources available for development. The public has to face reality, but the politicians are standing in the way. This is one area where the UPA Government is trying to do the right thing and deserves the support of all intelligent persons who have no vested interest in creating confusion on a simple issue.

from:  M. Parthasarathi
Posted on: Aug 22, 2010 at 04:42 IST

This is a welcome step by the government in removing unwanted subsidies for petrol.This would help the union/state government's ability to fund projects by building better infrastructure like roads and uninterrupted electricity and clean uninterrupted water supply and making education and jobs a priority not just for cities, but also for semi-urban and rural areas.Increase in petrol prices would hurt the common man, but it is something we can live with.Because of bad infrastructure we are paying more anyway in terms of wear and tear of vehicles, household and commercial utilities. We are dying sooner and paying huge amounts on health cost and lead a unhealthy life.

from:  Balaji
Posted on: Aug 22, 2010 at 03:43 IST

I have no idea where India is heading to... On one side MPs are being given a pay hike of more than 300% (the money that is paid as tax by the common citizen) while on the other hand the same common citizen has to bear the brunt of PSU oil companies... Just wish that MPs fight for reduction in prices the same way they fought for their pay hike...

from:  Fazil
Posted on: Aug 22, 2010 at 00:39 IST
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