The government will continue to control the prices of petrol, diesel, cooking gas and kerosene as the proposal to deregulate fuel prices thereby making them market determined has been put on the backburner.
“No decision can be taken in a hurry,” said a senior petroleum ministry official on the condition of anonymity. “De-regulating fuel prices would only benefit private oil companies without bringing any benefit to the state-owned oil companies.”
Moreover, the international crude oil prices are on a rise again. The Indian basket of crude oil is above $40 a barrel even as oil prices in the international markets stayed below this level. “We need to wait till prices stabilise,” he said.
As far as the second round of reduction in auto fuel and cooking gas prices is concerned, sources in petroleum ministry said, it could happen anytime. Petroleum Minister Murli Deora has already gone on record saying that the price of petrol would be cut by Rs 5 a litre, diesel by Rs 2 a litre and cooking gas by Rs 25 a cylinder.
“There is already a political consensus on the issue of reducing prices. Even as some Congress leaders feel that this should be done closer to the polls, the reduction may be announced soon,” the official said.
While oil companies are currently making a profit of around Rs 12 a litre on petrol and Rs 5 a litre on diesel, they are still loosing on the sales of cooking gas and kerosene.