No immediate hike in fuel prices: Petroleum Minister

Despite deteriorating financial health of government-owned oil marketing companies (OMCs), Petroleum Minister, S. Jaipal Reddy, indicated that the Government will not rush into raising retail fuel prices, even though a falling rupee has increased the cost of oil imports. “Depreciation of rupee has naturally created unprecedented problems. This will lead to under-recoveries (revenue loss) of more than Rs 1,32,000 crore (in FY 2011),” said Reddy.

The OMCs are incurring revenue loss because of the high crude oil prices and recent decline in Indian rupee. “We are waiting for the situation to evolve. Therefore, we would like to wait and watch before I can take a view,” Reddy said.

Rupee devalued from Rs 45.58 per American dollar in the last few months to Rs 52.35 on November 23, after touching all time low on November 22 (Rs 52.73). This decline in rupee has increased the cost of imports especially oil, country meets around 79% of its oil needs via imports. The OMCs had earlier this month raised petrol price by Rs 1.8 a litre because of the fall in rupee, however, cut the rates by Rs 2.22 a litre from November 15 after decline in crude oil prices.

Currently, OMCs lose around Rs 10.17 a litre on diesel, Rs 25.66 per litre on kerosene and Rs 260.50 per domestic LPG cylinder. However Reddy said that no meeting of a high-powered ministerial panel has been called to decide on revising the rates. “No decision has been taken to convene the meeting of the Empowered Group of Ministers headed by Finance Minister Pranab Mukherjee to look at the prices of such sensitive products as LPG, kerosene and diesel,” he said.