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No oil price hike now: BPCL chief

NEW DELHI JULY 3. The public sector oil companies have decided not to raise petrol and diesel prices immediately as the level of hike warranted immediately is only marginal. The companies have decided to wait in the expectation that world oil prices will stabilise over the next few weeks.

Disclosing this here, the new chairman of the Bharat Petroleum Corporation (BPCL), Sarthak Behuria, said the difference between domestic and international prices was currently 25 paise. Therefore, it did not make sense to make changes at retail outlets all over the country for the relatively small level of increase. The burden on this account is estimated at about Rs. 4 to 5 crores which the company can easily sustain.

In an informal chat with presspersons, Mr. Behuria said the decision had been taken in consultation by the three major oil companies, including the Indian Oil Corporation and the Hindustan Petroleum Corporation Limited. He denied that the decision had been taken at the behest of the Petroleum Ministry. Under the new oil sector regime, oil marketing companies have to review domestic prices every fortnight. Last month, petrol and diesel prices had been raised on June 3 and June 16 but the expected revision did not take place on July 1.

On privatisation, he said it would be some time before any decision is taken as the Government had to first decide on the company's initial public offer. The process is expected to take about six months and sale of equity to a strategic partner would be considered only subsequently. Before that, other issues such as the fate of the Bina refinery, which BPCL now proposed to implement on its own, had to be resolved. Prices would have to be hiked if the difference between domestic and international rates rose beyond 50 paise per litre. But as global crude oil prices had stabilised at around $ 24 dollars a barrel, there was no need for an immediate hike.

Mr. Behuria said oil companies now fixed refinery gate prices of petroleum products based on the prices to be paid if the products were imported and then worked out the retail price after adding duties and local levies. The companies worked backwards on the fortnightly average of product prices to calculate the refinery gate price, which would form the base for calculation of consumer price after duties and commission are added.

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