In a bid to pass on the benefit of the fall in international crude oil prices to consumers, the government is considering another round of fuel price cut in the next few days.
Petroleum Minister Murli Deora said the “advisable reduction would be Rs 5 per litre for petrol, Rs 3 per litre for diesel and Rs 25 on LPG cylinder.”
Speaking to reporters in Mumbai on Saturday, he said: “We have spoken to the Prime Minister and in the next few days we will look at reducing the prices.”
After incurring losses on the sales of all the four subsidised products — petrol, diesel, kerosene and LPG — the three government-owned oil companies (Indian Oil Corporation, Bharat Petroleum, Hindustan Petroleum) now make a profit of Rs 11.48 per litre on petrol and Rs 2.92 per litre on diesel. This follows the decline in crude oil prices from a peak of $147 per barrel in July last year to around $40 per barrel currently.
The three fuel retailers, however, still claim under-recoveries of around Rs 15 crore per day on LPG and kerosene sales.
Deora was confident that the oil marketing companies would post profits in the current quarter “thanks to the low international crude oil prices.”
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Deora also said that the government would soon allow oil marketing companies to fix the fuel prices, in line with international trends. The government is in the process of working out the modalities for that.
The government had in April 2002 freed petrol and diesel prices from administrative control, following which the state retailers revised prices every fortnight in line with changes in costs. However, controls were brought back in 2004 when crude oil prices increased.