Oil minister rules out diesel price hike
Oil minister M Veerappa Moily Monday ruled out increasing the retail price of diesel as India looks at ways of increasing fuel efficiency and cutting its oil import bill.business Updated: Sep 09, 2013 22:55 IST
Oil minister M Veerappa Moily Monday ruled out increasing the retail price of diesel as India looks at ways of increasing fuel efficiency and cutting its oil import bill.
Diesel accounts for 40% of road fuel sales in India and is sold at a regulated, subsidized price.
Speaking to reporters after a meeting with Japanese oil ministry officials in Tokyo, Moily also said India was not planning to ask state-owned refiners to reduce their crude run rates.
"No, not while we are in a position to support all of the sectors of the economy by not reducing the supply, but at the same time there are ways available to ensure that we can conserve it," he said.
Prime Minister Manmohan Singh has asked Moily to help cut the country's oil import bill by $25 billion as India struggles with a rapidly depreciating rupee and a widening current account deficit.
India relies on imports to meet 80% of its crude oil demand. The country spent $144.3 billion on crude imports in fiscal 2012-13 (April-March).
With imports expected to be higher this fiscal year and oil prices on an upward trend, the import bill is set to rise further.
India is reportedly interested in buying more crude from Iran because it can pay for 45% of its Iranian crude purchases in rupees, but the situation is complicated by the strict US and EU sanctions against Tehran.
Moily said India would continue to import Iranian crude oil, "within the constraints" of current sanctions.
"As far as Iran is concerned there are a lot of constraints, but at the same time, within the constraints, we are importing the oil from Iran...maybe sometimes more, sometimes less," said Moily.
India's crude imports from Iran in fiscal 2012-13 fell sharply to 13.3 million mt from 18.1 million mt the previous year as a result of the sanctions. Managing demand for oil in India is also expected to figure in Moily's plans to reduce the country's dollar spending on oil imports.
"We're also looking at other steps to ensure that we'll have a big drive for energy conservation...we intend to see that $25-billion-worth import [bill] is cut, while at the same time not to cause any harm...as far as the economy of the country is concerned," said Moily, who is expected to announce energy conservation measures next week on his return from meetings in Tokyo and Seoul.