No fuel price cut for now: Oil Ministry

Government is not considering reduction in prices of petrol, diesel and domestic LPG despite crude falling to its lowest-level in 15 months as prices have to stablise at this level to wipe out the current revenue losses on fuel sales, an oil ministry official said.     

"There is no proposal to reduce fuel prices. We have to watch (the) situation for a few more weeks," said S Sundareshan, Additional Secretary in the Oil Ministry here.     

The basket of crude India buys yesterday averaged at $ 56.72 per barrel, a level at which state-run Bharat Petroleum, Indian Oil and Hindustan Petroleum would break even if global prices were to stabilise for a month.     

"Price reduction cannot be on the basis of price of one or two days. Yesterday it was at $ 56, today it has gone up (again) by two dollars.

We need prices to stabilise before we can think of a price reduction," he said.

The three firms, which in April-September reported a Rs 92,853 cr revenue loss (audited figure) on sale of petrol, diesel, LPG and kerosene, are likely to post bad results when they report on quartely earnings over the next two days.     

"Prices need to stabilise for four weeks (at current level) for us to consider a price cut," Sundareshan said.     

A sharp depreciation in the value of Indian rupee against the US dollar has wiped away some of the gains from falling international crude oil prices.

The three firms were to break even on fuel sales at $ 67 per barrel crude oil when one USD was equivalent to 41 Indian rupees.     

However, with rupee at the 50 mark, the break even point has now shifted to $ 57 per barrel.      Retailers sell petrol at a loss of Rs 2.85 a litre, diesel at Rs 7.26, kerosene at Rs 29.19 per litre and domestic LPG at a loss of Rs 333 per cylinder.