Prices of petroleum fuels went up too. Petro-products prices have evoked consumer protests even in the land of milk and honey, the United States. Keeping oil prices down has cost the Indian government Rs 7,500 crore so far and could cost more if prices of diesel (gas oil) were not pegged to international rates.

It is obviously that time of the year again, time to budget for costlier fuels, especially high speed diesel (HSD). Diesel prices have been put on ``import parity'' by a cabinet decision in September 1997. That decision stipulates a price revision at least every sixty days, depending on the direction in which global prices move. Since the last revision in diesel prices in October 1999, international prices have gone up by at least 26 per cent. Globally gas oil (HSD) prices are $44 a tonne higher from $166 a tonne fob (free on board) in October 1999 to roughly $210 a tonne fob keeping high speed diesel prices at the October 1999 ex-storage point price of Rs 9.60 a litre has cost the oil pool account Rs 500 crore a month.

Yet, a smart guess is that Union minister for petroleum and natural gas Ram Naik, will not announce a hike in petro-fuel prices just yet. Naik, who has been conversing with oil ministers and the Opec secretary general at the Petroleum Congress at Calgary over the last week, will prefer to see what the most powerful cartel in the world does on Wednesday.

The petroleum minister should wait for the Opec decision for two reasons. The Opec meeting in Vienna is expected to soften global crude prices. Naik should also baulk at increasing diesel, cooking gas or kerosene prices at a time when some parts of the country are in the midst of state polls.The Centre's decision to roll back subsidies on kerosene and LPG earlier this year, had to be put off, after Trinamool Congress leader and railway minister Mamata Banerjee and Chief Minister of AP and the ruling NDA ally Chandrababu Naidu put their foot down the first time. The LPG and kerosene price hikes came after the panchayat elections in AP.

Bypolls and local elections in West Bengal and Tamil Nadu may have a similar impact on any decision to hike prices of petroleum products now. The petroleum minister is unlikely to find support for such a move from his cabinet colleagues and allies of the ruling coalition. Naik's best bet is the Opec meet in Vienna on June 21. Meetings between non-Opec member Mexico and key Opec producer Saudi Arabia, have already sparked off speculations that oil producing countries would opt for a further increase in crude production.

Energy experts have forecast that Opec members would increase output by at least another 500,000 barrels per day, softening prices worldwide. Even if the oil producing countries do not switch on their taps at once, positive statements emanating from them would help soften crude oil prices that have begun to go out of control. Already speculations about an Opec decision to hike output have reigned in crude and naphtha prices in the futures market. At the end of the week, crude futures for August delivery shed 73 cents at the International Petroleum Exchange (IPE) in London and naphtha futures shed some on the SIMEX in Singapore.

If crude oil and so petroleum products, prices reach affordable levels in the global market, the petroleum ministry could afford to stave off an immediate increase in diesel, LPG and kerosene prices. The oil pool account earns roughly Rs 4,000 crore a month from the inflated price of petrol and another Rs 9000 crore from what petroleum refineries pay for crude oil. The refineries pay the prevailing international price, but a third of the crude processed in the country comes from domestic producers like the ONGC and Oil India Limited (OIL).

The two public sector crude producers get a government determined ``ceiling'' price. What ONGC and OIL do not get, flows into the oil pool account. The inflow of funds to the oil pool account pays for the Rs 11,000 crore of subsidies on LPG and kerosene. At present it also pays for Rs 500 crore of subsidy a month on diesel. At Re 1 a litre increase in diesel prices could stem the drain on the oil pool. Softening of diesel prices in the world market could control that drain.

A great deal, obviously, will depend on that meeting in Vienna among Opec members. That meeting will decide how prices of crude oil and petro-fuels will move and so, what the Indian consumer will pay for diesel, kerosene and liquefied petroleum gas (LPG).