Oil prices continued their downslide on Thursday as the global credit crunch and fears for slowing energy demand took their toll. Crude oil prices are now down about 50% from July?s record highs of $147 a barrel. New York?s main futures contract, light sweet crude for November delivery, dropped $1.34 to $73.20 a barrel. It slid $4.09 at the close of floor trading on Wednesday at the New York Mercantile Exchange. The Brent North Sea crude for November delivery eased $1.30 to 69.50.

Brent settled down $3.73 in London on Wednesday and dropped below the $70 level for the first time since June 2007 in electronic trading after the market closed. The Indian basket of crude oil has also touched $68 a barrel levels and is slowly inching close to the $61 a barrel mark, at which the government will consider lowering the domestic retail prices of fuels. The Indian basket of crude oil was at $129 per barrel at the time of June price revision.

However, petroleum minister Murli Deora ruled out an immediate reduction in petrol, diesel and domestic LPG prices saying the international oil prices haven?t fallen so much to warrant a rate cut. ?I welcome fall in oil prices. We are watching the situation very carefully and hope there is further reduction so that we can think (of a price reduction),? he said. A price reduction may be considered if crude oil falls to $61 per barrel, he said. The basket of crude oil India buys was at this year?s lowest of $ 68.81 per barrel.

?There is no case for downward revision in prices now,? petroleum secretary RS Pandey said. Indian Oil, Bharat Petroleum and Hindustan Petroleum are currently losing about Rs 280 crore per day on sale of petrol, diesel, domestic LPG and kerosene as the government has not allowed them to align retail prices with cost of production.

Oil firms were supposed to break-even on fuel sales if the price of Indian basket of crude oil comes down to $67 per barrel. However, with 20% depreciation in value of rupee against the US dollar, the break-even point is now at $61 a barrel, Pandey said.

They are losing Rs 2.85 a litre on petrol, Rs 7.26 on diesel, Rs 29.19 on kerosene and Rs 335.03 per LPG cylinder and are projected to lose Rs 1,47,592 crore in revenues this fiscal.