Oil rate beyond control, says Centre

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Rejecting immediate cut in petrol price, the government said Friday it would watch rupee movement and international crude prices for a “few days” before taking a decision on a rollback.

“We in the ministry can’t remain indifferent to your feelings. But we are at this point not able to take a definitive view because there is a lot of volatility in the value of rupee and in the price of crude oil. We want to know about the stable trends in this space. We will come back to you with our views after a few days,” said petroleum minister S. Jaipal Reddy.

Asked how much time would it take for the government to decide, the minister said he meant a “few days, not weeks”.

public sector oil marketing companies hiked petrol price by Rs7.54 a litre Wednesday sparking widespread protests by UPA members, allies and opposition parties.

Mr Reddy said the Centre and state governments should together arrive at a formula to cut taxes on fuel to give relief to the people.

“When we sacrificed some revenue, some state governments did respond but not in corresponding degree. I have been speaking to finance minister [Pranab Mukherjee] and we have decided to consult state governments before we take a decision,” he said.

While the Centre earns Rs14.78 from the sale of every litre of petrol, state governments get between Rs12.20 and Rs19.83.

The minister said all political parties needed to work together. “Rhetoric is easy.” Mr Reddy claimed the huge hike in petrol price was needed due to the rupee fall and increase in international crude prices.

“There is no good time to increase prices,” he said, adding that oil PSUs had lost over Rs7,100 crore in the past two years on petrol and Rs2,330 crore in April and May this year.