The government will cut petrol and diesel prices when there is a sustained drop in global crude oil prices, Petroleum Minister Murli Deora said on Thursday.
"International oil prices continue to fluctuate. The government is keeping a close watch on the volatile prices," he said in a written reply to a question in Lok Sabha.
The Indian basket of crude oils was at about $67 per barrel when petrol and diesel prices were last raised in June 2006. It came down to $57.26 a barrel in October.
International crude oil prices went up to $75 per barrel in August but domestic retail prices were not raised despite the fact that the June hike had not completely covered surge in international prices, he said, adding seasonally oil prices were expected to increase during the winter months.
"The government will consider downward revision in the prices of petrol and diesel when there is sustained drop in the prices of crude in the international market," Deora said.
In the first half of 2006-07, the under-realisation of sale of petrol, diesel, LPG and kerosene was Rs 33,200 crore.
In a separate reply, Deora said oil companies had sought another upward revision in prices of petroleum products in July 2006 when the Indian crude basket touched $70.69 per barrel.
{{/usCountry}}In a separate reply, Deora said oil companies had sought another upward revision in prices of petroleum products in July 2006 when the Indian crude basket touched $70.69 per barrel.
{{/usCountry}}"However, the government did not accede to this proposal. At current prices of $57-58 per barrel, oil marketing companies are still incurring under recovery on diesel, PDS kerosene and domestic LPG," he said.
Oil firms were making a profit of Rs 4.50 a litre on petrol but were losing about Rs 0.45 to Rs 0.50 a litre on diesel. Loss on kerosene was over Rs 14 a litre and it lost Rs 102 per LPG cylinder.