IOC chief hints at cut in petrol price

Nov 09, 2011 |

New Delhi

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Indian Oil Corporation, which has the largest number of petrol pumps in the country, indicated on Tuesday that it may cut petrol prices in case international crude oil prices continue to decline and rupee does not depreciate further.

“I cannot say today if the prices will be reduced. We will take a call on November 15. It is still some days away. Every one rupee dip against the dollar adds up to Rs 0.90 per litre to the retail price. So, it is very essential that the rupee should not depreciate. Also, oil prices should reduce for us to consider a reduction in petrol prices,” said IOC chairperson R.S. Butola.

PSU oil marketing companies on Thursday hiked petrol prices by Rs 1.80 per litre in Delhi to offset the increase in the cost of import of crude oil.

After this, the government had come under tremendous pressure from both allies and opposition to roll back the price hike. Trinamul Congress MPs met Prime Minister Manmohan Singh on Tuesday to register their protest over the latest hike in petrol prices.

Petrol prices have been hiked four times this year and 10 times since petrol prices were decontrolled last year in June.

Also in June, the government had hiked the prices of diesel by Rs 3 a litre, kerosene Rs 2 a litre and LPG by Rs 50 a cylinder.

The petrol prices were deregulated last year and technically PSU oil companies are now free to hike its price in line with international crude oil prices. PSU oil marketing companies are expected to lose over Rs 130,000 crore this fiscal on selling diesel, domestic LPG and kerosene at subsidised rates.

Currently the PSU oil marketing companies are daily losing Rs 319 crore on the sale of diesel, PDS kerosene and domestic LPG at subsidised rates. During April to September period the loss on these three product was Rs 65,000 crore.

The government too is losing Rs 8.58 on the sale of every litre of diesel, Rs 26 per litre on kerosene and Rs 282 on every LPG cylinder.

Price hike pressure

* Decision on cutting petrol prices will be taken on November 15, said IOC chairperson

* It is crucial that the rupee does not depreciate as is the reduction in oil prices

* Petrol prices have been hiked 4 times this year and 10 times since it was decontrolled in June 2010

* Political parties, like the Trinamul Congress, have put pressure on the government to roll back prices

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