The central government will step in to regulate the decontrolled price of petrol if crude oil rates turn highly volatile in the international markets, Petroleum and Natural Gas Minister Murli Deora on Friday said.
"The government will not be a silent spectator in the event of crude oil prices turning volatile or remaining higher as it is our duty to protect consumers. The oil marketing firms are free to fix the petrol price when crude oil price is in the manageable range," Deora told reporters in Bangalore.
Justifying the price hike for the four basic petroleum products - petrol, diesel, kerosene and cooking gas (LPG) - last week, he said the government had no alternative but raise their prices and free petrol pricing from its control.
"We consider a range of $60-66 per barrel comfortable for oil companies to determine the market-driven price of petrol. They are working on the measures to revise the rates in line with the international crude prices," Petroleum Secretary S. Sundereshan said.
In a major reform move June 25, the government decontrolled petrol pricing, with an increase of Rs.3 per litre, diesel by Rs.2, kerosene by Rs.3 and cooking gas by Rs.35 per cylinder.
"Our job is to see that the decontrolled price of petrol will not have any adverse effect on consumers," Deora asserted.
The state-run oil marketing firms - IOC, HPCL and BPCL - are working on the modalities, including periodicity of revision of petrol price in consultation with the petroleum ministry.
Clarifying the ministry's position on under-recoveries, Deora said losses incurred on the regulated prices of diesel, kerosene and cooking gas would have to be absorbed by marketing firms as there would not be any compensation from the government in the form of oil bonds.