Jaipal Reddy rules out diesel price hike

On his first day in office as Petroleum and Natural Gas Minister on Thursday, Jaipal Reddy put to rest speculations of a rise in diesel prices, saying there was no such “plan on the anvil.”

Talking to journalists, he said the country's energy security was a very important issue and he would whole-heartedly welcome foreign investments in exploiting the hydrocarbon resources of the country. “We welcome foreign investors to come and join hands with India to exploit the hydrocarbon potential. We will ensure that a congenial atmosphere is created for such an investment in the country.”

Mr. Reddy said he was not in favour of harsh decisions. An increase in diesel prices would affect farmers the most and he would like to avoid it. “Any hike is like a wound in their heart. It is not the right time for any kind of hike. We will also take care that the oil marketing companies do not bleed, and are adequately compensated.”

Expressing “nervousness” at the rising oil prices, he said there would be no major departure from the policies of his predecessor, Murli Deora. “I am a new Minister in the old government. I am morally and politically accountable for all the policies and decisions of my predecessor. They were collective decisions of the Cabinet. To expect any big change is unrealistic.”

The Minister said, “At the moment, we import 75 per cent of our crude requirements. The country is growing at 8-9 per cent. The need for fuel too is growing. At the same time, prices are ruling high in the international market. It is a dilemma. During such times, all decisions cannot be pleasant. Daily popularity cannot be the guiding force.”

Mr. Reddy, however, ruled out any rollback of the increase in petrol prices, effected seven times since the prices were deregulated in June, 2010. The oil marketing companies were expected to lose Rs.72,000 crore in revenue this fiscal through sale of subsidised fuel. His Ministry would press the Finance Ministry for a reduction in the customs duty on crude oil and the excise duty on diesel.