The Hindu Business Line : India can deal with rising oil prices: Aiyar

THE Minister for Petroleum and Natural Gas, Mr Mani Shankar Aiyar, said that India is in a better position today to deal with higher crude oil prices.

Speaking at a Confederation of Indian Industry (CII) meet on `Building Partnerships' for upstream oil and gas, the Minister hoped that the international crude oil prices would ease in the near future. He added that even if the import price of crude oil stands around $50 a barrel, India was in a position to face it.

"We are in a better position to deal with oil prices as we have over $135 billion of foreign exchange reserves. We can afford to pay higher prices," Mr Aiyar said. He pointed out that India had frozen petrol and diesel prices in November and stability in global crude oil prices will see a relatively stable domestic oil-pricing regime.

The Minister said that with the US elections over and winter demand easing, international prices are likely to stabilise, paving the way for a stable domestic fuel pricing policy. He, however, pointed out that there was no rationale behind the rise in oil prices.

Talking about the April 1 deadline for supply of cleaner fuels by refiners (Bharat II and Bharat III), the Minister said, "It may be extended by a few weeks." India wants refiners to supply Euro III and Euro II compliant diesel and gasoline aimed at checking vehicular pollution and curbing respiratory diseases caused by motor vehicle emissions. Euro III compliant fuel is to be supplied to the metropolitan cities, while Euro II compliant fuel is meant for the rest of the country.

While most refiners have said they would be able to supply cleaner fuels by the April 1 deadline, some aren't ready. Euro III and Euro II are standards that comply with globally acceptable vehicular emission norms.

Referring to the need to improve infrastructure to entice global oil companies in India, Mr Aiyar said his Ministry was devising a new gas pricing policy, a new transportation policy and a new regulatory policy for the oil and gas sector. He added that the Ministry was working on a competitive policy to allow gas companies to transport and sell their produce, a move which would benefit the public sector company, GAIL (India).

On a reference to China, the Minister said that the Ministry in conjunction with the Ministry of External Affairs was setting up a taskforce to prepare grounds for his visit to China. The taskforce would identify sectors of cooperation as well as areas of competition, he added.

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