Though global crude prices have been climbing steadily, currently touching $ 67 (Rs 2750) a barrel, Petroleum Minister Murli Deora on Tuesday ruled out any immediate increase in the prices of automobile fuel in the country. "Global crude prices keep changing everyday. We cannot change prices everyday," said Deora.
He was speaking to reporters at the launch of Indian Oil Corporation's (IOC) first gas station in the capital which will supply ethanol blended petrol.
"The UPA government stands for the common man," Deora stated. "UPA Chairperson Sonia Gandhi is not in favour of any increase in prices of kerosene and liquiefied petroleum gas either. We stand by that."
However, S Behuria, Chairman and Managing Director, IOC, added the sobering observation that oil companies had under-recoveries of Rs 150 crore per day at current prices of fuel. They were incurring a loss of Rs 5.24 per litre on petrol, Rs 4.40 per litre on diesel, Rs 14.67 per litre on kerosene and Rs 169 per cylinder on LPG. Under-recoveries for the year was estimated at Rs 55.000 crore.
Earlier, in his inaugural speech, Deora underlined the need to enhance the country's energy security and find alternative sources of energy which do not have an adverse impact on the environment. He stressed the need to have a range of different fuels to suit the emerging needs of the nation and its people.
"In addition to the accelerating efforts for sourcing oil and gas at home and through international participation, India sees enhancement in its energy security through building energy corridors for supply of oil and gas across and within its borders," he said.
Calling energy conservation a global challenge, the minister said the hydrocarbon industry fully recognised the economic, social and environmental implications of its operations, and its responsibility to provide communities with economical and eco-friendly energy resources.
He cited ethanol blending with petrol as an example of how to reduce adverse environmental impact of fossil fuels.
Deora said the sugar manufacturers association want the launching of ethanol blended petrol programme on an all-India basis. They have also assured that sufficient quantities of ethanol will be available to the oil companies.
The state-owned oil marketing companies need 560 thousand kilolitres of ethanol per annum. Based on its availability, the government may consider the introduction of 10 per cent ethanol blending in petrol in the future.
Besides being an environment friendly fuel, ethanol has a positive impact in terms of increased demand for sugarcane, reduction in fuel imports and savings in valuable foreign exchange. Increased demand for ethanol will strengthen rural economics and create more jobs in the rural sector, Deora pointed out.
To implement the programme nationwide, the petroleum ministry had issued notifications for implementation of ethanol blended petrol programme on all-India basis except in Jammu & Kashmir, North-Eastern states, Andaman & Nicobar and Lakshdweep where Ethanol cannot be made available due to logistic reasons.
With effect from November 2006, supply of EBP commenced initially in Uttar Pradesh, Uttarakhand and subsequently in Maharashtra, Delhi, Karnataka, Tamil Nadu, Goa and Andhra Pradesh. Oil companies have also issued a letter of intent for procurement of ethanol in Bihar and Jharkhand and supplies will commence shortly.