The government has no plans to increase petrol and diesel prices even though international crude rates have touched $100 per barrel, Oil Minister S Jaipal Reddy said here today.
"We are not at the moment thinking of increasing prices," he told reporters here.
The spurt in international oil prices means that state fuel retailers will end the fiscal with around Rs 80,000 crore of revenue losses on selling diesel, domestic LPG and kerosene below cost.
"... The oil marketing companies are facing a burden of the order of Rs 80,000 crore (and) may be Rs 100,000 crore (this fiscal)," he said.
Even in case of petrol, whose price fixation was freed from government control in June last year, there is no proposal to raise prices just now, Reddy said.
State-owned Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum, who have raised petrol prices seven times since June last year, currently sell petrol at a loss of Rs 1-2 per litre.
"At the moment, there is no proposal on table of oil companies to increase price of petrol," he said, adding public opinion cannot be ignored even in free market.
Reddy said half of the revenue loss fuel retailers incur on selling diesel, domestic LPG and kerosene would be met by the government by way of cash doleout. Another one-third would be contributed by upstream firms like ONGC.
The rest will "somehow be digested by oil marketing companies," he said.
Oil Secretary S Sundareshan said of the Rs 46,000 crore revenue loss on fuel sales in the first three quarters this fiscal, the government provided Rs 21,000 crore and upstream firms contributed one-third.
Reddy said he hoped the Finance Minister will cut customs and excise duty on crude oil and products in the Budget to ease the burden of rising global oil prices.
Earlier, dedicating the Indian Oil Corp' naphtha cracker complex to the nation, he said the nation needs to find more oil to cut its reliance on imports to meet demand.
India currently imports 80 per cent of its oil needs.
The cracker, that produces raw material for making plastic, went on-stream in March last year but it was formally inaugurated only today.
Speaking on the occasion, Sundareshan said the nation's oil refining capacity will jump up to 240 million tonnes in the next two years from the current about 187 million tonnes.
Even the present refining capacity is in excess of 146 million tonnes of fuel demand, he said.
Listing the new plants, he said Bharat Petroleum will commission a 6 million tonnes unit at Bina in Madhya Pradesh shortly, while Hindustan Petroleum is building a 9 million tonnes unit at Bhatinda in Punjab. Also, IOC is constructing a 9 million tonnes refinery at Paradip in Orissa.
Built adjacent to IOC's 15 million tonnes a year Panipat refinery, the naphtha cracker along with PX-PTA units is the state-owned firm's big push into petrochemical business.
The Rs 14,439 crore naphtha cracker complex will produce 800,000 tonnes per annum of ethylene and 600,000 tonnes of propylene - raw material for manufacturing polymers.
Ethylene and polypropylene produced acts as feed for downstream polymer units like polypropylene, Linear Low Density/High Density Polyethylene Swing unit, High Density Polyethylene unit and Mono Ethylene Glycol unit.
These polymer products are used for manufacturing moulded plastic containers/barrels, heavy duty films, stretch wrap films, shopping bags, automobile parts, pipes and sheets, moulded furniture, yarn and fibre and many other household and industrial items.
The naphtha cracker will source feedstock naphtha from IOC's Koyali, Panipat Mathura refineries.
IOC's Panipat refiner meets the demand of petroleum products not only in Haryana but also of entire North-west region, including Punjab, Jammu and Kashmir, Himachal, Chandigarh, Uttaranchal and parts of Rajasthan and Delhi.
IOC has nine refineries with a combined refining capacity of 65.7 million tonnes a year.
