The Hindu Business Line : Oil price hike some weeks away, says Deora

New Delhi, Nov. 13 After giving indications that a petrol price hike could happen any time this week, the Government today said it has no immediate plans to increase prices of petroleum products.

“The objective is not to burden the aam adami. It is some weeks (away). It is not being done today,” the Minister for Petroleum and Natural Gas, Mr Murli Deora, said on Tuesday in response to a question on hike in oil prices while addressing the Economic Editors’ Conference.

With the international prices of crude steadily increasing in the recent past, under-recoveries by the oil marketing companies (OMCs) have been rising proportionately. “As the international oil prices are close to $100 per barrel, under-recoveries can only go up further and we are very concerned,” the Minister said.

The average price of the Indian crude basket touched a high of $88.9 this month, up from an average price of $65 in April this year. The average price of crude for a seven-month period ending October has been estimated at $72, officials said and added that the average price of the Indian basket was $69 when the Cabinet was approached to issue oil bonds.

To help out the oil companies, the Government had earlier decided to issue bonds worth Rs 23,457 crore. While being non-committal on whether more oil bonds would be issued during the year to offset the mounting losses, Ministry officials said that as per the recent Cabinet decision, the OMCs had to meet only one-third of the actual increase in costs.

Rupee to rescue

Besides, the strengthening of the rupee against the dollar had also helped cut under-recoveries by about Rs 23,000 crore. “But for the strengthening of the rupee, the under-recoveries would have been in the region of Rs 90,000 crore. As of today, they stand at Rs 68,640 crore,” an official said. While the rupee had appreciated 12 per cent, crude prices had increased by around 16 per cent, officials added.

The Petroleum Ministry is also in touch with other Ministries, including Finance, to work out an early workable solution to the problem. “Appropriate decision on price would be taken at an appropriate time,” Mr Deora said.

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