Rising crude prices disturbing, says FM

Written by Press Trust of India | New Delhi | Updated: Feb 29 2012, 06:46am hrs
Describing the surge in crude oil prices a disturbing trend, finance minister Pranab Mukherjee on Tuesday said it is too early to say what its impact will be on the economy.

(The rise in prices of) crude, of course, is a disturbing fact, no doubt. It will be too premature to say what would be the adverse impact on what sector..., he said.

Crude oil prices in the international market surged recently following tensions between Iran and the West over Tehrans controversial nuclear programme.

Meanwhile, oil minister S Jaipal Reddy had said India is not facing any external pressure on buying crude oil from Iran and will abide by UN sanctions only, not those imposed by any bloc of nations.

Rejecting the US and European sanctions against Iran, he said: We respect UN sanctions but will not honour any other sanction. We have cordial relations with Iran and we continue to import oil from them.

The US has imposed sanctions that deny access to the US financial system to any foreign bank that conducts business with the Central Bank of Iran.

Brent crude for April delivery was trading at $123.75 in morning trade. With hardening of crude price, there is widespread speculation that petrol and possibly diesel prices are likely to be hiked by R2-4 per litre once assembly elections in five states, including Uttar Pradesh, are completed this week. State-owned oil companies are losing about R4 per litre on petrol, industry officials said.