No rollback of fuel prices, says Deora
New Delhi   03-Jul-2010

The Union Petroleum Minister, Mr. Murli Deora, on Friday said that there will be no immediate roll back of fuel prices even though there has been a decline in international crude oil prices.

But Mr. Deora, addressing a news conference here, said the Centre will not hesitate to step in whenever there is a huge volatility in crude oil prices. "The Government will not be a silent spectator if any dealer or oil companies charge higher prices. We will protect the consumers' interest," he said. "Oil marketing companies are free to determine petrol prices but the Government will step in if there is high volatility in crude prices," Mr Deora said.

He also did not give a timeline for decontrol of diesel prices. "Let us first see how the decontrol of petrol prices pans out," Mr Deora said.

Opposition talks

Hitting back at the Opposition, he pointed out that when the NDA Government was in power, the price of kerosene was increased from Rs 2 to Rs 9 and the same set of parties was now opposing the increase by a mere Rs 3 which has been effected after eight years. The Opposition has called for a nationwide strike on July 5 to protest increase in fuel prices.

Mr Deora was here to launch IndiaOil's (IOC) Chennai-Bangalore petroleum products' pipeline and the Rajiv Gandhi Gramin LPG Vitarak Yojana.

The Petroleum Secretary, Mr S Sundareshan, said with the decontrol of petrol prices, the "under-recoveries" will come down by about Rs 20,000 crore to Rs 53,000 crore. He said petrol prices will be market-driven but the government will intervene if there is a high volatility of crude oil prices.

Decontrol effects

The IOC's Acting Chairman, Mr B.M. Bansal, said with the decontrol of petrol prices, the borrowings of the corporation is expected to be pegged at the current level of Rs 44,000 crore. "We hope to keep it that level during the next year also," he said. Before the decontrol, IOC's "under-recovery" was to the extent of Rs 120 crore a day which will now go down to about Rs 85 crore per day. Mr Bansal said oil marketing companies will take a decision in another two weeks on what the structure should be for fixing the petrol price. He said there was a possibility that it could be carried out every month though no firm decision has been taken yet.

Mr Sundareshan said even with the increase in diesel prices by Rs 2, the under-recovery burden is to the extent of Rs 23,000 crore. "We should have increased it by Rs 4 if the burden had to be eased," he pointed out. In the case of LPG, though the price has been increased by Rs 35, the under-recovery was about Rs 225 per cylinder. "We are the lowest in terms of LPG price among all countries importing LPG," Mr Sundareshan said.