Govt still grappling with oil prices

Amid reports that a hike in petrol and diesel prices was possible by mid-June, the Petroleum Ministry today said it was considering all aspects relating to the impact of a spurt in global oil prices on national oil companies.

Terming as "conjectural and premature" the reports that the ministry was considering a three-pronged strategy including a nominal hike in petro-product prices, duty cuts, and asking oil PSUs to partly absorb the burden, a ministry spokesperson said "all dimensions of the question are still under consideration of the Ministry of Petroleum and Natural Gas".

Public sector oil companies have been pressing the oil ministry for a hike in petrol and diesel prices, which were last revised on January 1, to account for the $6 a barrel increase in cost of raw material (crude oil).

The Indian basket of crude oil which averaged $29.33 a barrel in the second fortnight of December, based on which the last price hike of the Re 1 per litre in both was effected on January 1, by 18.7 per cent to $34.81 a barrel in the first fortnight of May.

The import parity price, the benchmark for deciding the domestic price, of petrol has risen by 17.6 per cent and diesel by 19.8 per cent during the period.

The state-run oil firms have been demanding a Rs 3.53 per litre increase in petrol prices "" from Rs 33.71 to Rs 37.24, and Rs 2.25 per litre in diesel prices "" from Rs 21.74 to Rs 23.99 per litre in Delhi.