Government has ruled out reducing retail fuel prices despite oil firms earning a profit on sale of petrol , and noted that companies were still incurring a loss of Rs 5.9 per litre on diesel.
NEW DELHI: Government has ruled out reducing retail fuel prices despite oil firms earning a profit on sale of petrol, thanks to easing global crude prices, and noted that companies were still incurring a loss of Rs 5.9 per litre on diesel.
"It is not an appropriate time to cut prices... Indeed, the international oil prices have declined over past two-three weeks, which is a welcome trend, but they (prices) have not fallen to levels warranting any cut in domestic sale prices," Petroleum Minister Murli Deora told reporters after flagging of a biking expedition here.
The decline in international oil prices has helped oil firms earn a profit of Rs 0.88 per litre on petrol, but they were still losing Rs 5.9 a litre on diesel. They were also losing Rs 199 per LPG cylinder and Rs 19 a litre on kerosene.
Government had in June raised petrol and diesel prices by Rs 3 and Rs 2 a litre respectively following a spike in crude oil prices. However, the hike was not commensurate enough to cover for the rise in cost of raw material (crude oil) and public sector oil companies were asked to bear a substantial part of the loss on fuel sale.
Deora said any reduction in fuel prices can be considered only if crude falls to around 50 dollars per barrel mark. "If crude falls to 50 dollars a barrel level, there will a thinking on cutting prices."
The Indian basket of crude is currently ruling at 56.28 dollars per barrel, down from historic highs of over 70 dollars per barrel last month.
An Indian Oil Corp (IOC) official said the softening of international oil prices would cut the company's revenue losses by almost half - from Rs 1,400 crore every fortnight to Rs 700 crore.
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