The Hindu : National : Deora rules out hike in fuel prices

Online edition of India's National Newspaper
Wednesday, May 16, 2007
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Deora rules out hike in fuel prices

Special Correspondent

But oil firms set to lose Rs. 50,000 cr.

Murli Deora

NEW DELHI: Petroleum and Natural Gas Minister Murli Deora on Tuesday ruled out any immediate hike in prices of petrol and diesel in the wake of the rise in international crude oil prices that have crossed the $65 a barrel barrier.

"International prices are volatile due to huge speculation. We cannot keep changing prices every day," Mr. Deora remarked at the launch of Ethanol Blended Petrol (EBP) at Shaheed Matbar Singh Negi filling station at Rohini in North-West Delhi.

Vice-President Bhairon Singh Shekhawat who was the chief guest on the occasion formally launched the EBP in the Capital. The petrol pump had been allotted to the family of a person who sacrificed his life during "Operation Vijay" in December 2001 Kargil conflict. Mr. Deora said Congress president Sonia Gandhi had asked him not to increase the prices of Kerosene and LPG so as not to burden the common man. "We continue to stick to the directive of the Congress president and have kept the prices unchanged," he remarked.

Speaking on the occasion, Indian Oil Corporation chairman Sarthak Behuria said public sector oil companies are likely to incur a loss of Rs. 50,000 crore in the current fiscal on selling fuel below cost. At current price level, IOC is losing Rs. 85 crore a day on sale of petrol, diesel, LPG and kerosene. Oil companies are selling petrol at a loss of Rs. 5.24 a litre, diesel Rs. 4.40 a litre, kerosene at Rs. 14.67 a litre and LPG at Rs. 167 a cylinder. "We estimate that the under-recoveries for the entire industry during 2007-08 will be about Rs, 50,000 crore," Mr. Behuria remarked.

On under-recoveries, Mr. Deora said the previous year's formula of sharing the revenue losses between Oil Marketing Companies companies, government and refining firms would continue to be in operation. The Oil and Natural Gas Corporation , the Oil India Limited and the Gas Authority of India Limited (GAIL) will be asked to bear one-third of the under-recoveries. The Government would provide a similar amount by issuing of bonds. Mr. Deora also informed that the Petroleum Ministry would shortly initiate discussions with the Finance Ministry on issue of oil bonds.

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