Ruling out any immediate rollback in the steep Rs 7.54 a litre hike in petrol prices, the government on Friday said it will watch international oil prices and rupee-dollar rate for "a few days" before taking any decision on cutting rates.
Amid growing street protests and unease within his own party, oil minister S Jaipal Reddy came out to defend the third price increase in a year and the first in almost seven months, saying the oil companies had exhausted all options.
Breaking his silence over the hike announced by oil companies on Wednesday, Reddy said: "All political parties including my own party (Congress) are populist... (but) we cannot run the country on populist sentiments".
State-owned oil companies had lost over Rs 7,100 crore in last two years on selling petrol despite having freedom to adjust rates in line with cost and in April and May this year they lost Rs 2,330 crore.
"We are duly conscious of the sense of disturbance among consumers (caused due to the price rise)," he said adding the hike was necessitated due to "double disaster" of devaluation of rupee against the US dollar and increase in international oil prices.
There is a downward trend in international oil prices but it would be hasty to arrive at a conclusion that retail pump prices can be reduced on the basis of this trend of few days. "We are not able to take a definitive view because there is lot of volatility in value of rupee vis a vis dollar and volatility in prices of crude oil," he said.
"We have decided to watch (the situation) for just a few days... and when I say few days it is days not week... we want to know (if this) is a stable trend (and) we will come back to you (about a reduction in rates)," he added.