Petrol, diesel prices may not be revised upwards

The government today indicated that state-run oil companies might not raise petrol and diesel prices when they come up for review on Wednesday.

"For the past few weeks, fuel prices have remained frozen (at July 31 levels) and the rise in inflation is due to the spillover of that price hike. Steps will continue to be taken (to curb inflation)," Petroleum Minister Mani Shankar Aiyar told reporters, ahead of his visit to Vienna for a Organisation of Petroleum Exporting Countries (Opec) meeting, where India is a special invitee.

"There is a level of comfort compared to the stratospheric level it had reached. In future, there may be somewhat greater stability, though at higher levels (than in the past)," he said.

The last revision was made at the end of July and the government subsequently cut Customs and excise duties on petroleum products to cushion oil marketing companies from losses.

Aiyar said he was satisfied with steps taken by the Opec to check rising international crude prices. He said India would take up the issue of the so-called Asian premium on oil in Vienna and will argue on the grounds of sustainable development.

Opec charges a premium of $0.6 to $1.2 a barrel on its supplies to India. The country pays an extra 40-45 per cent on imports, compared to what US and countries in Europe pay, because of its reliance on oil from the region.

Asian buyers import more than 65 per cent of their daily oil requirement of about 22 million barrels, with a little over 12 million barrels per day (bpd) coming from West Asia.

"What I intend to do is flag the issue and follow it up at the conference of the four big importers "" India, China, Japan and South Korea "" and six West Asian supplier countries in New Delhi some time in December or January," he said.

India spent $18.36 billion to buy 90.83 million tonnes of crude in 2003-04. During the first quarter of 2004-05, the crude import bill jumped 51 per cent to Rs 29,551 crore due to surge in international crude prices.

Aiyar is also slated to hold a series of bilateral meetings with Open and non-Opec member countries as part of his oil diplomacy initiative and try to get a favourable deal with these countries.