UPA says no to immediate fuel price hike

LOSS ACCOUNT: Centre says oil companies are currently incurring 25 per cent losses for selling fuel at cheaper rates.

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New Delhi: Fuel price hike may be long overdue in India considering the skyrocketing prices of crude in the international market. But the UPA Government has ruled out any hike in the retail prices of fuel in the immediate future.

Union Petroleum and Natural Gas Minister Murli Deora on Tuesday said the government will wait for international crude prices to stabilise from their current upward trend.

"There is no need for an immediate hike in the retail prices of fuel. We do not want to burden the common man and will wait for the international oil prices to stabilise before taking any decision," he told the economic editor's conference in New Delhi.

The government has been under pressure to increase the prices of fuel due to mounting under-recoveries of oil marketing companies, which are already reeling under huge losses due to rising global crude prices.

Deora said state-run companies, including Indian Oil Corporation and Hindustan Petroleum Corp Ltd, were bearing just 25 per cent of the losses for selling fuel at cheaper rates. "They can manage the losses," he said.

The Indian basket of crude is currently trading at $72 a barrel and after releasing oil bonds the average for the period of April-November is at $69 per barrel. "With international oil prices nudging towards $100 a barrel, under-recoveries can only go up further and we are very concerned about it," Deora said.

"The under-recoveries of both upstream and downstream oil marketing companies (OMCs) is at Rs 68,640 crore and government has released Rs 23,400 crore in oil bonds till the assessment done on October 4," Petroleum Secretary M S Srinivasan said.