No rise in fuel prices for now

The government has said that it had no plans to raise prices of petrol and diesel at this juncture as it has been compensating retailers for the rise in global crude prices, which has risen to to near $100.

With elections due in early December in Gujarat, the government is unlikely to risk antagonising voters by raising fuel prices, which are sold at a discount to protect the poor.

Petroleum minister Murli Deora told reporters that public sector oil marketing companies like Indian Oil and Hindustan Petroleum Corp Ltd were bearing just 25 per cent of the losses for selling fuel at lower rates.

He said that while these companies could cope with the losses, the government wanted to protect the poor

The government has been compensating public sector refiners and oil marketing companies to the extent of 42.7 per cent of their revenue losses due to product sales, and around 33 per cent for upstream oil companies through oil bonds, which adds to India''s fiscal burden.

The government has not raised administered prices for retail sales of fuels this year even though crude has risen sharply to record highs. India''s crude basket has risen by 145 per cent since April 2004, but retail prices of petrol have gone up by just 29 per cent and those of diesel by 40 per cent.