LPG, diesel prices: Situation difficult, but no need to panic, says Pranab
Haldia   26-Dec-2010

Ahead of the meeting of the Empowered Group of Ministers for reviewing the price of diesel and LPG, the Union Finance Minister, Mr Pranab Mukherjee, today said all issues will be considered before arriving at any decision.

'Prices of petroleum products are always under review. No decision has been taken on hiking prices of LPG and diesel. Everything will have to be factored in before any decision which will be taken at an appropriate time," Mr Mukherjee, who is Chairman of the eGOM, told reporters here.

"Let us not press the panic button. The situation is difficult and we will do what is needed," he said.

Mr Mukherjee was speaking on the sidelines of the IndianOil's Haldia refinery expansion programme.

With crude oil prices hovering at $91 a barrel, under-re-coveries on account of selling diesel, kerosene and LPG cylinders were to the extent of Rs 5.41 a litre, Rs 16.88 a litre and Rs 272.19, respectively, he said.

The Finance Minister said that on earlier occasions too the oil companies had faced difficult times but came out of it without becoming sick.

New Hydrocracker Unit

Meanwhile, speaking at a function after inaugurating the new hydrocracker unit here, Mr Mukherjee said that India had emerged a major exporter of petroleum products in spite of having a low production base.

The new hydrocracker unit and the Haldia refinery expansion are estimated to have cost nearly Rs 2,869 crore.

The hydrocracker unit would manufacture high speed diesel conforming to BS III and BSIV standards.

The country's crude oil production at the moment is 35 million tonnes and is set to go up by six to 7 mt, Mr Mukherjee said.

The Petroleum Secretary, Mr S. Sunderashan, said that the country's refining capacity will rise from 185 mt to 240 mt by the end of Eleventh Plan.

"The refining capacity will be enough to sustain till 2020. All the expansion has been done from internal accruals of the oil companies without any budgetary support," Mr Sunderashan said.

Refining capacity

The Chairman and Managing Director of IndianOil, Mr. B.M. Bansal, said that post expansion, refining capacity would rise from six mt to 7.5

The Petroleum and Natural Gas Minister, Mr Murli Deora, was also present at the occasion.