Petroleum Minister Murli Deora on Tuesday ruled out an immediate hike in the prices of auto fuels — petrol and diesel — and said an appropriate decision would be “taken in some weeks”.
“We cannot burden the people every time there is an increase in global crude prices. I am consulting my colleague in the finance ministry for an early workable solution to the problem,” he told the Economic Editors’ Conference here.
The minister said the cabinet has already agreed that the finance ministry would issue bonds to the tune of 42.70 per cent of the under recoveries faced by the public sector oil marketing companies. State-owned upstream companies would take 33 per cent of the cross-subsidy burden, while oil marketing companies would have to take the remainder.
The cabinet decision was taken with an average crude oil price of $69 per barrel. The average price of crude oil between April and October this year is estimated to be $72 per barrel. As a result, the under recoveries for the current financial year have shot up from Rs. 55,000 crore to Rs. 68,640 crore at current prices.
The under recoveries have been marginally less due to the appreciation of rupee by 12 per cent in the past six months. The under recoveries could have touched Rs. 90,000 crore, but for the rupee appreciation against dollar resulted in the burden being reduced by nearly Rs. 23,000 crore.
Deora said the seventh round of New Exploration Licensing Policy (NELP-VII) will be launched in December-January. “We expect that 60 blocks may be offered for exploration and production, comprising 30 onshore blocks, 15 shallow water blocks and 15 deep and ultra deep water blocks in both the east and west coast offshore area,” he added.
On the transnational Iran-Pakistan-India (IPI) pipeline and Turkmenistan-Afghanistan-Pakitan-India (TAPI) pipeline, the minister said he would visit Pakistan later this month to attend a steering committee meeting of TAPI. Officials said India and Pakistan could also discuss bilateral issues regarding the IPI pipeline on the sidelines of the meeting.