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Fuel prices may go up in October

Crude prices have more than doubled in the past year. The pinch is bigger for India as it imports about 75 per cent of the crude it needs, reports Gaurav Choudhury.

business Updated: Jul 04, 2008 01:53 IST
Gaurav Choudhury

The crude shock refuses to go away. On Thursday, global crude prices hit an all-time high of $146.69 per barrel, prompting top officials back home hint at another round of fuel price hike.

The latest spike dashed hopes of any immediate recovery for the country’s stock market that has fallen nearly 40 per cent this year. The 30-share Sensex tumbled 571 points, or 4.2 per cent, to close at 13,094.

“We have to move to a high oil price regime,” Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters on the sidelines of a conference in Delhi.

Separately, Petroleum Secretary MS Srinivasan, who is attending the World Petroleum Congress in Madrid, told reporters that the government will review the government-controlled retail prices of petrol and diesel in October.

“(The) Situation will be revisited in October when we will take stock of the scenario emerging out of international oil prices,” PTI quoted him as saying.

Crude prices have more than doubled in the past year. The pinch is bigger for India as it imports about 75 per cent of the crude it needs. This year’s crude import bill is expected to rise to $110-120 billion.

Despite a steep hike in petrol and diesel prices last month, analysts say the retail fuel prices at home have yet to align with crude prices in the global market. “The retail oil prices are still in the levels of $75 per barrel of crude oil,” said Naresh Takkar at credit rating firm ICRA.