Oil cos to review petrol prices every month
New Delhi   15-Jul-2010

The public sector oil companies - IndianOil, Hindustan Petroleum Corporation, and Bharat Petroleum Corporation - will review petrol prices on a monthly basis. And changes in price, if any, will be through mutual consensus and remain at a uniform rate for the PSU companies.

This may come as a respite for consumers, who need not immediately worry about differential pricing of the product from one petrol pump to another. The Government had decontrolled the petrol prices on June 25.

Mr S.V. Narasimhan, Director (Finance), IndianOil, after a meeting convened by the Petroleum Secretary, Mr S. Sundareshan, of executives of the three oil companies, told newspersons that the oil marketing companies will once in a month coordinate on petrol pricing based on international crude oil and product price trend.

There is unlikely to be any change in petrol prices in July if the international prices and rupee's exchange rate remains at the current levels. On June 25, petrol price was decontrolled leading to an increase of Rs 3.50/litre. "We have reviewed the situation and as of now there is no need for revising petrol prices," he said.

Minutes of the meeting

Asked if there will be a fixed date to change prices, Mr Narasimhan said no. He said that the three companies will sell petrol at the same rate for three months but this may change depending on the competition in the market.

Commenting on the decision, the Petroleum Secretary said, "Right from the beginning we have been saying that the price of petrol will be market-determined and the oil companies will take the decision themselves. The decision of oil companies would be based on factors like what is the competition doing and whether prices will be determined jointly or on individual basis."

Asked what has been the response of private sector players like Reliance Industries Ltd and Essar, he said, "We are given to understand that everyone has adopted a wait and watch policy for next few months until the situation stabilises. At present, there is no scope for price revision of petrol."

When asked by when diesel will be deregulated, the Secretary emphasised that there is "no thinking on revising diesel prices."

On the issue of subsidy burden sharing to compensate the public sector oil retailers for revenue loss incurred for selling petroleum products below the market price, he said, for the first quarter of 2010-11, the upstream companies such as ONGC and Oil India will shoulder a burden of about Rs 6,000 crore. The total under-recovery for the quarter is expected to be about Rs 20,000 crore.