Govt likely to review auto fuel prices

Consumers could be in for a bonanza this year. The government today said it would take a re-look at retail prices of transportation fuels if global crude oil prices dips below $50 a barrel.

While Brent crude oil prices stood at $56.43 a barrel on Monday, the Indian basket was at $52.87 a barrel on Friday, a drop of 4 per cent over Thursday's price.

"The market is volatile. We are closely watching the international price scenario," Petroleum Minister Murli Deora said.

He added that the government was waiting for international prices to stabilise before taking any decision on cutting retail prices further.

Brent crude oil, which was around $60-62 a barrel in December 2006 fell to $52.90 per barrel on Friday, down $1.66 from Thursday. The fall is mainly due to continued forecasts for warmer winter in the US and a US energy department report showing a rise in gasoline stockpiles by 5.6 million barrels in the week ended December 29.
 

SLICK NUMBERS
Period	$/barrel
January 5	52.87
December	60.35
November	57.80
October	57.27
September	61.04
August	70.84
April-June	67.13
July-September	67.71
October-December	58.45
* Actual price, while, others are average prices

The Indian basket of crude oil comprises Oman-Dubai sour grade crude and Brent sweet crude in 58:42 ratio. The basket had averaged $60.35 per barrel in December.

In November, it was $57.80 per barrel. Retail prices of petrol and diesel were cut by Rs 2 a litre and Re 1 a litre on November 29 last year.

In spite of the drop in prices public sector oil retailing firms continue to lose about Rs 100 crore a day on selling petroleum products below the cost.

Public sector oil companies recently saw margins on retail sales turning negative.

The largest marketer Indian Oil Corporation (IOC) has started losing 23 paisa per litre on sale of petrol.

Under-recoveries on diesel stands at Rs 1.43 a litre, on kerosene Rs 13-14 per litre and LPG Rs 150 per cylinder.

"With even petrol margins going into the red, our daily under-recovery has jumped to around Rs 60 crore," said an official at IOC, which controls a majority of the country's retail market.