Oil companies enjoy full freedom… only on paper

09 August 2006

Fuel prices in India are not going up. That's because oil companies cannot revise prices, even though petroleum minister Murli Deora has promised them pricing freedom. CNBC-TV18 reports that it is freedom only on paper as of now.

Pricing freedom is a mirage that oil companies can chase but never catch up with. Petroleum minister Murli Deora says that oil firms have been given the freedom to adjust domestic retail prices.

This is in line with a cabinet decision that was taken on 4 June, 2006, when the government hiked petrol and diesel prices.

Subsequently, the petroleum secretary met with the heads of PSU oil firms on June 20 where the issue was discussed.

Oil firms were informed that once the Indian basket of crude, or the price at which India buys crude, touches $70, pricing freedom would automatically kick in. After that, for every dollar increase in domestic prices, oil firms could adjust domestic retail prices correspondingly.

But oil companies like Indian Oil Corporation say that they are yet to receive a written communication from the government on this.
It was also decided that fuel price review would be a monthly affair.