IOC open to petrol & diesel price cut

Kolkata, Nov 19 | Updated: Nov 20 2005, 07:07am hrs
The oil companies will not object if the government decides to cut the prices of petrol and diesel following the significant drop in world crude oil prices since the record highs hit in August.

Indian Oil Corporation, the countrys largest refiner, indicated on Saturday that it is open to a price cut if the Indian basket of crude falls below $50 a barrel. However, there is a catch.

IOCs chairman Shekhar Behuria said, We will support a price cut provided crude falls below $50 a barrel and the government takes care of our under recoveries in kerosene and LPG, whose price is still ruling at a very high level.

He also said that the government shouldnt take any hasty decision and instead wait for a sustained low price regime.

Recent crude price movements are still volatile and fluctuating though within a band. A decision should be taken only if the crude enters a low price regime, said the IOC chairman, who was in city to chair a meeting of the Standing Committee on Public Enterprises.

World oil prices have dipped to around $56 a barrel since late August, when they hit peak of $70 a barrel. Indian oil majors were last allowed to increase prices of petrol and diesel in September. Petrol prices were raised by Rs 3 a litre, and those of diesel by around Rs 2.

Mr Behuria said that, out of about Rs 11,500 crore of oil bonds to be issued by the government, IOCs share would be Rs 6,000 crore.