More oil price cuts soon

30 December 2008

Petroleum minister Murli Deora has said the government was considering passing on the benefit of the fall in international crude oil prices to consumers.

The government had earlier this month reduced the price of petrol by Rs5 a litre and diesel by Rs2 per litre with effect from 6 December (See: Petrol, diesel prices cut)

Deora said that with crude oil sliding below $36 a barrel, there was further scope for cutting the petrol price by up to Rs11 a litre and diesel by Rs3 per litre.

 Deora, however, refused to set a timeframe for the price cuts but stated that "measures" were in the offing. With the international oil prices reaching a stable level, the government feels there is scope for further cuts in prices of petroleum products.
 
The public sector oil firms continue to lose Rs17.26 a litre on kerosene and Rs148.38 per domestic LPG cylinder, which is compensated by the petrol and desiel prices,  as they incur huge under-recoveries (revenue losses) on sales of kerosene through PDS, and domestic LPG.

The three fuel retailers lose Rs33 crore per day on the sale of kerosene and Rs15 crore a day on LPG sales.

Oil price cuts to stimulate economy
The GDP growth forecast has been falling in view of the current global financial crisis, with the Centre for Monitoring Indian Economy (CMIE) having lowered its projection for the growth of the Indian economy to 7.5 per cent from its earlier estimate of 8.2 per cent.