Ram Naik rules out hike in oil prices

Our Infrastructure Bureau

New Delhi, Sept 12: Petroleum minister Ram Naik has ruled out any immediate increase in domestic oil prices. Apprehensions had been expressed that an increase in international oil prices following terrorist attacks on the United States would push up the domestic oil prices.

Addressing a press conference here on Wednesday, Mr Naik said, “There is no reason for immediate increase in price.” He felt the panic reaction in the international oil market will settle down in a week or so. He welcomed the Organisation of Petroleum and Exporting Countries (Opec) statement of maintaining oil supplies. The minister assured that the country had goods stocks of petroleum products which could last two months.

He said crude oil purchases are made through long-term contracts and minor fluctuations would not have much effect. Long-term oil purchases normally have a price band which is determined on the basis of average international price prevalent on the day of shipping and five days before and after it. The country has tied up supply till November.

However, the chairman and managing director, Oil and Natural Gas Corporation (ONGC), Subir Raha said the fluctuations in crude prices will have an adverse impact on the country’s oil pool deficit.
“However, we need to watch the trend carefully over the next few days”, he added.