Govt draws up action plan as oil nudges $100. With the rise of global crude oil prices "" currently nudging $100 per barrel "" the "losses" of the three government-owned oil marketing companies have gone up to a whopping Rs 240 crore per day.
The appreciating rupee and strong refining margins have only been able to partially offset the surging oil prices, leaving the government "very very worried," Petroleum Minister Murli Deora tells Rakteem Katakey. The plan is to protect the "aam aadmi" as well as the oil companies, through an additional relief package.
Global oil prices are close to $100 per barrel. How worried are you?
We are very very worried. Yesterday I met not just (Finance Minister) Mr Chidambaram, but also Prime Minister Manmohan Singh and Sonia Gandhi regarding a relief package for the oil marketing companies.
They are all very worried. We are trying to find a solution, and a quick one, as soon as possible. The entire government is worried.
Does that mean that the government-owned oil marketing companies are likely to get another relief package soon, in addition to the oil bonds announced last month?
Like I said, we are all working towards a solution. We have four options before us "" give out more bonds, raise prices of automobile fuels, reduce excise duty on petroleum products and cut import duties on crude oil. We are actively considering all the options. It could be a combination of measures.
Is a fuel price hike round the corner?
That I cannot say. We are considering all the four options.
What came out of your meetings with the prime minister, the finance minister and Mrs Gandhi?
They understand the problems and are looking into them. We will come up with something soon.
Will the aam admi continue to be protected against high crude oil prices?
We have always been saying that. We have always protected the aam admi from high crude oil prices. When countries all over the world are increasing retail selling prices of fuels we have been able to keep them constant. We are trying our best to protect the common man.
Will the pass-through of oil price increases not be a big risk to inflation?
I think we must make a distinction between the pass-through of the oil price increase that has already happened and any increase that may happen. We do not know how the increase in prices that has already happened will be passed.
It will take place "" in two months, three months, nine months "" unless there is a reversal in oil prices. And that reversal does not seem likely. The timing may not be very clear but it will happen.
Therefore, we are not taking that into account in our inflation outlook. And, as I try to explain, if there is a pass-through, inflation would be closer to 5 per cent and if the pass-through does not happen, the number may appear a little less than 5 per cent.
