The government on Tuesday ruled out a cut in retail fuel prices till global oil prices dips to USD 67 a barrel, saying the fall in rupee against the dollar had negated the 38 per cent drop in crude prices.
"There is no case for cut in fuel prices now," Petroleum Minister Murli Deora told reporters in New Delhi.
He said the depreciation in rupee has squared off fall in crude oil prices.
Oil prices on Tuesday dropped more than USD three in Asian trade on fears for the health of the global economy, after the collapse of US investment bank Lehman Brothers.
New York's main contract, light sweet crude for October delivery, plunged USD 3.95 to USD 91.76 a barrel.
The Indian rupee lost 48 paise to slip to a two-year low of 46.53 against the greenback in early trade on Tuesday, as demand for the US dollar surged.
State-run Indian Oil, Hindustan Petroleum and Bharat Petroleum are still losing hundreds of crores of rupees a day on sale of petrol, diesel, domestic LPG and kerosene despite oil coming off its peak of USD 147 per barrel in June.