New Delhi : Government today dropped hints that petrol and diesel prices may be cut further if the downward slide in international crude prices continues.
“We will watch (crude oil) prices (to see) if further reduction is possible,” Home Minister P Chidambaram said replying to supplementaries during the Question Hour in Rajya Sabha (Upper House).
Government earlier this month cut petrol price by Rs 5 a litre and diesel by Rs 2 per litre as crude oil prices dipped from an all-time high of USD 147 a barrel in July to under USD 45 a barrel.
Chidambaram, the former Finance Minister who is answering questions pertaining to Finance Ministry on behalf of Prime Minister Manmohan Singh who now holds that portfolio, said the Government would look into demands for further reduction in auto fuel prices.
Even after the price cut, public sector oil firms were making a profit of Rs 9.98 on sale of every litre of petrol and Rs 1.03 per litre on diesel. The further softening in global oil prices has seen these profits widen to Rs 11.48 per litre on petrol and Rs 2.92 a litre on diesel, officials said.
The oil companies, however, continue to lose Rs 17.26 per litre on PDS kerosene and Rs 148.38 per domestic LPG cylinder.
Indian Oil, Bharat Petroleum and Hindustan Petroleum are together projected to lose Rs 111,500 crore in revenues this fiscal on fuel sales, they said.(One Crore: ten million)
Oil Minister Murli Deora in a separate reply said the December 6 reduction was only an “interim measure”.
“Further reduction in the prices of petrol and diesel had not been found feasible (on December 6) in view of the continuing under-recoveries (losses) on sale of PDS kerosene and domestic LPG,” he said.