Disparity in global, domestic oil prices due to fixed costs, says Indian Oil Corp

Indian Oil on Friday said there are several fixed elements such as transportation and refining costs which restrict oil marketing companies (OMCs) passing on the entire benefit arising out of fall in global oil prices.

"Crude rate is one part of the fluctuating prices of petrol in International market. There are other fixed elements, like transportation and the process of reform and refine, rates of which are not coming down, adding to end product prices," Indian Oil Corp Chairman B Ashok told a press conference here.

He was replying to a specific question on the general complaints over the disparity between petroleum products prices and International crude prices.

Stating that the crude oil a barrel in June 2014 was sold at $114 whereas it was now $50, he said considering the decrease, the oil companies have passed on the benefit to the consumers as much as possible.

Besides, the companies have to calculate the exchange rate USD versus Rupee, which was now over Rs.60, as against about Rs.45, while fixing the prices, Ashok said.

To a question whether the reported preference of automobile manufacturers to come out with more diesel cars will have effect on petrol, Ashok said "growth of petrol sales is robust and is in double digit and the balance is still tilting towards petrol. So I hope the petrol will continue to get the same patronage," he said.