Union Petroleum Minister S Jaipal Reddy on Monday said the government would ensure proper supply of petrol and petroleum products for consumers in the country in the light of the US sanctions on Iran.
“...Problems are arising from the sanctions. However, I would like to assure that there would be no supply problems for the consumers in India,” he said. The government is also hopeful of sorting out problems of payment with Iran, he said.
“We have lined up other sources of supply,” replied the minister while responding to a question as to what would happen if crude oil supplies, which account for 12 per cent of the country’s total oil imports, stop due to problems arising out of the US sanctions. The minister said the government and the oil companies were closely monitoring the situation.
Oil companies are also watching the volatility of crude oil prices alongside the impact of rupee value on import prices, he said, while admitting it was a difficult situation.
On shortage of natural gas supplies, the minister said efforts were on to bring natural gas from outside the country to meet the domestic needs.
Govt to talk to states on diesel price hike
On plans to reduce losses on diesel supplies in India, Reddy said his ministry would wait for an appropriate time to increase the diesel prices as the inflationary pressures had started easing out.
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“Prices of diesel can be increased only in small installments as the economy is very largely dieselised. Any increase would have a cascading effect on the economy. Therefore, we have think carefully,” the minister said.
He also said the government would talk to state governments before taking any decision in this regard.
PSU losses
According to the minister, more than 50 per cent of the total losses being incurred by the public sector oil companies and the government was coming from diesel. Underpricing of diesel was contributing Rs 75,000-80,000 crore to the total losses of around Rs 1.4 lakh crore.
On the Vedanta-Cairn deal, Reddy said the approval at this stage was just a formality. “I am confident that the Cabinet will approve the deal,” he said.