Government mulls petrol price cut

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New Delhi: The government said on Monday it will cut petrol and diesel prices if it finds the fall in international oil prices to have helped oil companies overcome losses on fuel sales.

"We will be very happy to reduce prices but first we have to examine the impact of the fall in international prices. We have to see as to what extent the fall has helped us (bridge loss on fuel sales)," Petroleum Minister Murli Deora

said.

Although the international oil prices have fallen from a high of over $75 a barrel in August to just over $56 per barrel now, oil companies continue to make losses on sale of diesel, domestic cooking gas (LPG) and kerosene.

However, the companies are making a profit of Rs 4.50 a litre on petrol sale. But on diesel, they are still losing Rs 1.55 per litre. They are losing Rs 151 on sale of every 14.2 kg LPG cylinder and another Rs 14 on every litre of kerosene.

"We are working out the arithmetics to see if there is a scope for any reduction," he said.

Deora said a decision on cutting petrol and diesel prices, which were on June 5 raised by Rs 4 and Rs 2 a litre respectively, would depend on the extent of oil bonds the Government will give oil companies to cover for losses on LPG and kerosene sale and the contribution to be made by upstream firms like ONGC.

The Government is to issue oil bonds worth Rs 28,300 crore to oil companies for the full fiscal and issued first tranche of bonds worth Rs 5,000 crore last month. Two more tranches of similar amount are likely to be issued in November-December to cover for losses on LPG and Kerosene in April-September period.