Govt waits for OPEC move before price hike

The government is likely to wait for the outcome of the June 3 meeting of the oil cartel Organisation of Petroleum Exporting Countries (OPEC) before effecting any revision of petrol and diesel prices.

Petroleum Minister Mani Shankar Aiyar said the new petroleum pricing policy of the government would have a "human face".

The petroleum minister said he would continue reforms process in his sector "while demonstratively ensuring sensitivity to the human consequences of decisions taken in the name of reforms".

The minister, who was speaking at an award-giving function, said a holistic review of the policy for fuel pricing would be done keeping in mind the sensitivities of the poorest of poor.

"The decision they (OPEC) take will show whether the recent steep rise in international oil prices is aberrant and transitory. As also whether greater stability at more moderate prices is the more likely prospect.

"This is such an important parameter for determining our approach to the domestic pricing of sensitive petroleum products that it must be taken into account in determining the timing, phasing and content of these (price hike) decisions," he said.

The petroleum minister indicated the huge burden accumulated due to freeze on liquified petroleum gas and kerosene prices for the last two years and petrol and diesel prices since January, despite rise in cost of raw material, would be shared by all stakeholders, including the government and the public sector oil companies.

This implies a marginal increase in prices of fuels, cut in government duties and oil companies bearing a part of the burden.

The oil sector was dismantled in April 2002 and oil companies given freedom to decide prices of petrol and diesel every fortnight. The next price review is due on Monday.