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Saturday, Sep 21, 2019

No rollback of petro prices: Deora

The Petroleum Minister also refused to promise that the fuel prices would not be hiked in the near future.

india Updated: Jun 10, 2006 18:33 IST
Press Trust of India
Press Trust of India

The Centre, which has asked states not to levy sales tax on the incremental component of fuel prices to reduce burden on the common man, on Saturday reiterated that there would be no roll-back of Monday's Cabinet decision on petro prices.

"As of now there is no scope for reconsidering the decision. I don't see any possibility of a roll-back," Petroleum Minister Murli Deora told reporters in Chennai.

He also refused to promise that the petrol price would not be hiked in the near future. "It all depends on the international crude prices."

Deora said crude prices stood at $68 per barrel now. Centre had hiked petrol prices taking crude prices at $54.5 and left the rest uncovered, he said.

The oil marketing companies, which had a networth of Rs 41,500 crore, had registered an 'under recovery' of Rs 73,500 crore and if the prices had not been increased the entire net worth of these companies would have been wiped out in a couple of years.

The June 5, hike had only accounted for one eighth of the under recovery, he said.

The oil companies, which had a profit of Rs 11,000 crore three years back, had a profit of Rs 5410 crore last year and if the prices were not increased, the profit would have come down to Rs 57 crore in the current fiscal, Petroleum Secretary MS Srinivasan said.

Srinivasan said the hike of Rs 4 a litre in the price of petrol and Rs 2 on diesel had passed only 16 per cent of the burden of the oil companies to the common man and Kerosene and LPG prices were untouched.
The rest of the burden would be borne by the Centre and oil companies themselves, he said.

India, which produces only 25 per cent of its crude oil needs, depends heavily on imports.

To meet the needs, Indian oil companies were present in 15 countries like Sudan, Vietnam, Nigeria and Ecuador for procurement of crude, he said, adding that ten more countries would be added to the list very soon.

Denying the charge that petrol and diesel prices hike would have telling effect on the prices of essential commodities, he said the Rangarajan Committee had forecast a minimal increase of zero point four per cent.

Even after the hike, petrol and diesel prices were cheap as compared to neighbouring countries of Nepal, Pakistan and Sri Lanka, he said.

He said in a bid to encourage ethanol added fuel, the Centre would enter into a long term agreement with sugar mills to supply ethanol.

On bio diesel, he said the Petroleum Ministry had already announced the procurement price for bio diesel and over 25 centres were opened for procurement.

First Published: Jun 10, 2006 14:24 IST