The Hindu : National : Rising crude prices put government in re-think mode

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Sunday, Oct 28, 2007
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National

Rising crude prices put government in re-think mode

Sujay Mehdudia

NEW DELHI: The international crude oil prices maintaining an upward surge touching $90 a barrel on Friday have put the government in the re-think mode and upset its financial compensation plan for the Oil Marketing Companies forcing it to look at other options including a marginal increase in the price of motor fuel.

Although the international crude oil prices had shown signs of sobering during the last one week, the sudden surge on Friday in prices due to a weakened dollar, signs of increased tension along the Turkish-Iraq border and stringent U.S. sanctions against Iran have left the Government with little choice but to start exploring various options including a price hike.

Experts are of the view that the recent financial compensation package announced by the government to bail out OMCs in shape of oil bonds and some duty concessions would not be enough to meet the rising losses.

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