Petrol, diesel prices to hold for now

Consumers will not have to worry about paying more for petrol and diesel for another couple of months at least, even as oil-marketing companies continue to be worried.

The Ministry Of Petroleum and Natural Gas has ruled out a hike in the prices of petrol and diesel in the near future even as the price of the Indian basket of crude oil continues to remain above $65 a barrel.

"Prices will not be hiked even if the global crude oil crosses $70 a barrel," a senior petroleum ministry official said.

"A hike in prices of auto fuels is not possible because we have to calculate the average under-recoveries over the next couple of months, based on which auto fuel prices will be looked at," the official said.

The price of the basket of crude oil that Indian refiners buy has risen almost 10.79 per cent to $66.12 a barrel over the last one month.

The high prices "� the average price in March was $60.26 a barrel compared with $56.53 in February "� has resulted in the state-owned oil marketing companies losing close to Rs 120 crore a day from retail sales.

This has resulted in the industry calling for a hike in retail prices of petrol and diesel.

However, the government is not yet prepared to raise prices of automobile fuels. Petroleum Minister Murli Deora recently told Business Standard that the government did not yet have a price benchmark above which prices of auto fuels will be hiked.

An oil ministry official maintained there will be no hike in prices of petrol and diesel for atleast a couple of months.

With the closing of the financial year, the "accounts" of all losses that oil marketing companies incurred by selling the four petroleum products "� petrol, diesel, LPG and kerosene "� below market prices are closed as well. Leftover oil bonds from the previous year are also not rolled over to the next financial year.

In the last financial year the government had cleared oil bonds worth Rs 28,300 crore to the oil marketing companies. Of these around Rs 24,000 crore worth of bonds were disbursed.

The government had hiked prices of petrol and diesel by Rs 4 a litre and Rs 2 a litre in June last year. It then cut prices twice, first for diesel by Rs 2 and then for petrol by Re 1 in November and February respectively.