Government for oil price stability before price cuts
08 Jan 2007
The government would like global oil prices to stabilise before it takes a decision on any more price cuts on domestic petrol and diesel retail prices. In November 2005, the government had reduced the prices of petrol and diesel by 4.25 per cent and 3 per cent respectively.
According to petroleum minister, Murli Deora, the government hoped to make some profit if crude prices continue to decline in the next fortnight from January 16 and could then consider reducing prices.
Indian Oil Corporation, the largest retailer in India, which sells kerosene, cooking gas, diesel and petrol at prices predetermined by the government, currently loses around Rs50 crore every day.
IOC incurs a loss of around Rs1.40 on every litre of diesel, Rs13 to Rs14 on kerosene and Rs15 on each 14.2 kg cylinder of cooking gas that it sells.
After having hit a record $78 a barrel on world markets in July and then selling for around $61, the Indian basket of crude oil fell to its lowest level in FY 2007 last week to $52.87 a barrel. India imports 70 per cent of its crude oil requirements.
