Cheaper crude not to benefit the Indian consumer

Mumbai: Lower crude prices will not be passed on to consumers but instead it will be used to reduce the government's total subsidy cost, finance minister P Chidambaram said.

"When the international oil prices increased, we did not pass the entire burden on to the consumers and the reduced international oil prices have only lessened the subsidy burden of firms such as ONGC, oil marketing companies and the government," Chidambaram said.

A reduction in subsidy outgo would mean that funds would be available for re-investment by these companies, he said. However, he said the reduced international prices would not affect the size of oil bonds to be issued by the government. The government had proposed to issue oil bonds worth Rs14,150 crore to the oil companies in September. He however, declined to give the exact timing of the issue.

Crude prices currently rules at around $58 a barrel in Western markets. The price of crude has shed more than seven per cent since the start of the week.