Further fuel price cut under consideration

Kochi | Updated: Dec 30 2008, 05:41am hrs
In first clear indications of a further reduction in petrol and diesel prices, petroleum minister Murli Deora today said the government was considering passing on the benefit of the fall in international crude oil prices to consumers.

The government had earlier this month reduced the price of petrol by Rs 5 a litre and diesel by Rs 2 per litre, and with crude oil sliding below $40 a barrel, there was further scope for cutting the petrol price by up to Rs 11 a litre and diesel by Rs 3 per litre.

We are considering reducing prices of oil products, he said addressing Congress party leaders here.

Deora, however, refused to set himself a timeframe but stated that measures were in the offing.

Now that (international) prices have stabilised to a large extent, there is scope for reducing prices. We are actively considering that, he said. The cut in petrol and diesel prices may be moderated by the fact that public sector oil firms continue to lose Rs 17.26 a litre on kerosene and Rs 148.38 per domestic LPG cylinder.

We intend to protect consumers (of these products), he said. Deora said public sector oil companies continue to incur huge under-recoveries (revenue losses) on sales of kerosene through PDS, and domestic LPG. The three fuel retailers lose Rs 33 crore per day on the sale of kerosene and Rs 15 crore a day on LPG sales. Deora was addressing a function to felicitate Hibi Eden, who has been appointed National Students Union of India president. He said he had gone to Saudi Arabia recently and people there were shocked at the fall in crude oil prices.

The Centre was giving Rs 58,000 crore as subsidy for four petroleum products kerosene, petrol, diesel and LPG. Kerosene prices are Rs 9 per litre and India is the only country where it is so cheap. In India, kerosene is cheaper than water. We will not increase the prices of kerosene under any circumstances, he said. Stating that every month about 10 crore LPG cylinders are being distributed, he said the government would look into all aspects of reducing the price of this product also.