Petrol prices to be cut before February: Deora

Written by Economy Bureau | New Delhi | Updated: Dec 31 2008, 06:51am hrs
The Congress-led United Progressive Alliance (UPA), it seems, is trying to oil its way to form the government again next year. After slashing prices of petrol and diesel early this month, it has set the stage rolling for another reduction in January 2009.

Minister for Petroleum and Natural Gas Murli Deora on Tuesday said the prices of petroleum products would be cut before February. He was visiting the famous Sree Krishna temple in Guruvayur, Kerala.

He said that proposal on supply of cooking gas through pipelines was also under consideration in view of the shortage of LPG cylinders. The country consumes 10 crore cylinders every month.

On December 5, the UPA government reduced price of petrol by Rs 5 a litre and diesel by Rs 2 per litre, first after nearly two years. The cut was induced by crude oil sliding below $50 a barrel from the high of $147 a barrel in July.

The crude oil has further dropped below $40 a barrel, creating scope for more cut in petrol price by up to Rs 11 a litre and diesel by Rs 3 per litre.

On Monday, while addressing Congress party leaders Deora had said, Now that (international) prices have stabilised to a large extent, there is scope for reducing prices. We are actively considering that.

However, 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.

Per day, Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleumthe three fuel retailerslose Rs 33 crore on the sale of kerosene and Rs 15 crore on LPG sales. India is the only country where kerosene is sold at Rs 9 a litre. We will not increase the prices of kerosene under any circumstances, he had said.

The Centre gives Rs 58,000 crore subsidy to the three oil marketing companies for selling kerosene, petrol, diesel and LPG at administered rates.

Deora had said that the government would also look into all aspects of reducing the prices of LPG.