Govt watching oil prices

The government today said it was keeping a watch on the movement of global crude oil prices and appropriate steps would be taken at the right time on its domestic pricing.

"The petroleum ministry is watching the (global) petroleum prices and will take an appropriate decision at an appropriate time," Finance Minister P Chidambaram said on the sidelines of a function of the Railways.

He was replying to a question on whether the government was thinking of cutting domestic petroleum prices in the wake of a slight decline in global crude prices on Wednesday.

"Where did you get the impression that petroleum prices have come down? It has again gone up today. Don't jump to conclusions," he said.

Crude prices had dipped to $43 a barrel yesterday, but rose to $44 a barrel today. Petroleum prices were one of the factors that pushed up inflation to over 7 per cent this year.

Asked whether the government was thinking of measures to curb excess liquidity, Chidambaram said: "That depends on the liquidity situation at that time. Yesterday, liquidity had tightened because of advance tax payments." Call rates have also gone up due to tighter liquidity conditions, he said.

On tax collections, Chidambaram said it was a "bright spot" although excise collections were a "weak spot".

The minister did not comment on whether a shortfall in excise mop-up would lead to higher fiscal deficit during the current financial year. Fiscal deficit is budgeted at 4.4 per cent of the GDP for 2004-05.