Oil prices will not be reduced, says Aiyar

Petrol and diesel prices are unlikely to be reduced in step with the international trend. "The international market is volatile and we need a proper pricing policy (for a stable pricing regime)," Petroleum Minister Mani Shankar Aiyar told reporters here today.

Aiyar said international oil prices had been rising for the most part of 2004 and had only started declining in the past two weeks. "So, we will have to wait for the prices to stabilise."

He said petrol and diesel were freed from administrative control when the international prices not as volatile as in 2004. "So, the import parity price cannot be effected at the moment."

Aiyar said the Ashok Lahiri committee, appointed by the finance ministry to look at restructuring duties on crude oil and petroleum products for insulating the domestic market from international volatility, had yet to submit its report and the new pricing policy would come only after its recommendations had been considered.

Meanwhile, Aiyar will be leaving for Myanmar for a meeting on January 12 on a pipeline that will bring in natural gas to India. Besides India and Myanmar, Bangladesh will also be taking part in the discussions since the pipeline is proposed to cross the country.

India wants to bring in gas from the Shwe field in block A-1 in offshore Myanmar. It is also expecting some discoveries in the adjacent block, A-3.

ONGC Videsh has a 20 per cent stake and GAIL (India) 10 per cent in the fileds with Daewoo being the operator of the two blocks. Bangladesh will earn about $125 million a year as transit fee for the pipeline, that will run through Arakan in Myanmar to Mizoram and Tripura in India and then crossing Bangladesh to reach Kolkata.

Apart from the onshore pipeline, GAIL is also studying the options of an offshore pipeline or importing the gas in liquified form. The offshore option includes a 500-600 km pipeline across the Bay of Bengal that will end at a re-gassification terminal at Haldia.