As stable economy, India shouldn't react quickly to oil price hike: Pradhan

Pradhan was replying to a query whether the government will cut excise duty on petrol and diesel which have touched their all-time highs

Oil Minister Dharmendra Pradhan said Saturday India as a stable economy should avoid any knee-jerk reaction to volatile crude oil prices, indicating no cut in taxes on fuel despite petrol breaching the Rs 80 per litre level in the Capital.

Pradhan blamed strengthening of the US dollar, non-fulfilment of commitment made by OPEC countries regarding additional oil production and crisis in Iran, Venezuela and Turkey for the rise in prices of crude oil.

"As a stable economy, as the fastest growing major economy, lets not give any knee jerk reaction, lets wait," the minister said on the sidelines of the Global Mobility Summit 'MOVE' here.

He was replying to a query whether the government will cut excise duty on petrol and diesel which have touched their all-time highs.

Petrol price in the national capital Saturday crossed the Rs 80 mark for the first time ever as rupee depreciation made imports costlier. Petrol was priced at Rs 80.38 per litre while diesel touched its highest level of Rs 72.51 a litre in delhi.

The Centre currently levies a total excise duty of Rs 19.48 per litre of petrol and Rs 15.33 per litre on diesel. On top of this, states levy Value Added Tax -- the lowest being in Andaman and Nicobar Islands where 6 per cent sales tax is charged on both the fuels.

Opposition parties have called for a nation-wide 'Bharat Bandh' Monday (September 10) to protest against the spiralling fuel prices.

Pradhan at the summit said that all oil marketing companies are planning to put up electric charging points at retail outlets to encourage electric vehicles.

The minister pointed out that electrical mobility has become a talking point and the country should also use only electric vehicles.

"We want to encourage use of electric vehicles in India , because we want to reduce pollution. But from where we will source electricity for electric vehicles?

"If you are saying that the transportation fuel is causing pollution and if you are going to produce electricity for electric vehicle by burning coal then it will take pollution of towns to villages," he noted.

Pradhan opined that electric vehicles should be run on solar energy.

"But to complement solar energy, we will need gas based power plant ... So only focussing on electric vehicles will not do justice to other forms of energy," he emphasised.

Addressing delegates at the summit, Pradhan said the use of CNG, LNG and Bio-CNG is being promoted in the sector and there are plans in place to have about 10,000 CNG stations within a decade, covering over half of the country.

The minister also pointed out that despite changing global trends, consumption of petrol and diesel in India is growing in excess of 5 per cent per annum.

"Whatever be the scenario of the growth of electric vehicles, India would still need higher refining capacities," he opined.

Pradhan also informed about the efforts being made by public sector oil companies and some private enterprises in setting up LNG distribution infrastructure.

He said that 12 bio-refineries are being set up and steps are being taken to achieve 10 per cent ethanol blending and soon Bio-ATF and Bio-CNG policies will be formulated.

"Indian Oil has tied up with the Delhi Government to introduce 50 Hydrogen enriched CNG buses next year,"he said.