The Hindu Business Line : Naik hints at cut in petrol, diesel prices

THE Petroleum Minister, Mr Ram Naik, on Wednesday indicated that the oil marketing companies may reduce the retail prices of petrol and diesel in view of the recent fall in global crude oil prices.

The companies are due to review the retail prices of the two products on April 15.

"After the outbreak of war in Iraq, crude prices have fallen substantially, largely due to end of uncertainty. Oil companies will take into account these changes and I am sure they will make consumers happy. Since prices have stabilised, we can expect a reduction,'' Mr Naik told newspersons here on Wednesday.

Refiners have bought crude at prices as high as $ 32 per barrel, prior to the war in Iraq. Currently, crude prices are ruling at around $ 24 per barrel.

"Though the decline started immediately after the war started on March 20, the oil companies did not revise the price of petrol and diesel on April 1 as the situation was still volatile,'' Mr Naik said.

The consumer has witnessed a 26 per cent rise in his petrol bill since the beginning of the year. In the capital city of Delhi, petrol, which was selling at Rs 26.54 per litre on April 1, 2002, now retails at Rs 33.49 per litre. On April 1, 2002, global crude was trading at the $ 21 per barrel.

Arguing in favour of a reduction in prices, Mr Naik said that Indian refiners purchased crude at an average price of $ 27 per barrel in the second fortnight of March. This further fell to $ 25.09 per barrel in the subsequent fortnight.

Oil marketing companies argue against passing the entire benefit of lower crude prices to consumers on the grounds that they bore losses of around Rs 4,000 crore last fiscal due to non-revision of kerosene and LPG prices.

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