Indian crude basket at all-time high

The price of the Indian basket of crude oil touched an all-time high of $75.30 per barrel on Thursday, the latest day for which data are available, sending alarm bells ringing in the government.

"It is a matter of great concern to us," Petroleum Minister Murli Deora told Business Standard.

High oil prices not only mean a rise in the import bill but would also mean an increasing burden on the three government-owned oil-marketing companies "" Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) "" who sell petroleum products at subsidised rates.

The price has peaked at a time when the United Progressive Alliance (UPA) government is under immense pressure from its Left allies over the civilian nuclear deal with the US and would, therefore, find it difficult to raise retail prices of petrol and diesel.

"We are looking at various options (to provide relief)," Deora added. According to a petroleum ministry official, one of the proposals "in the works" is a fast-track issue of oil bonds by the government. "This could happen in the next fortnight," the official added.

With the gap between the desired selling price and the retail selling price in Delhi at Rs 4.40 per litre for diesel, Rs 2.20 per litre for petrol, Rs 14.90 for kerosene and Rs 185 for LPG, these companies are facing working capital constraints and consequent rise in short-term borrowings.