New Delhi, Aug.10 (ANI): Union Petroleum and Natural Gas Minister S. Jaipal Reddy has said that the decline in global oil prices is not enough for the Indian government to order a roll back in the prices of petroleum products in the domestic market.
Global oil prices has dropped by over three percent, as worries about an economic slowdown spread after credit rating house Standard and Poor's cut the United States' top-tier credit rating late last Friday.
Reddy told media on Tuesday that: "The declining trend is not so big as to warrant a cut; secondly the declining trend should be significant, stable to warrant a cut. And, above all, I need to clarify for the moment, as I speak to you, oil companies are losing four paise per litre of petrol. If the decline takes place and if the trend stables we will surely reduce the price of petrol."
He, however, expressed hope about a further lowering of international prices, which in turn could enable the government to roll back the prices.
Brent crude was 22 cents lower at 103.52 dollars, having briefly moved into positive territory. It fell to as low as 98.74 dollars, touching its lowest since February 8. U.S. crude was down 94 cents at 80.37 dollars.
Meanwhile, India's opposition parties continued to criticize the government for not following the same trend in decline as it does during rise in global prices and demanded immediate rollback in the fuel prices.
"International prices of crude oil have come down, the logic given by the Finance Minister (Pranab Mukherjee) and Oil Minister (S. Jaipal Reddy) is that there is an increase in international market that's why they have increased that three rupees and two rupees. We demand that they should immediately roll back in the same analogy which they have given to the people and lessen the burden," said M.Venkaiah Naidu, a senior leader of the Bharatiya Janata Party.
A government panel had recently raised the price of LPG cylinder by 50 rupees per cylinder. It also raised the prices of kerosene oil by two rupees per litre and diesel by three rupees per litre.
India has been trying to keep a lid on stubbornly high inflation even as the economy shows signs of slowing. Headline inflation rose to 9.44 percent in June, above the central bank's comfort level of seven percent for end-March.
With inflation above nine percent and domestic fuel costs up by nearly 13 percent within a year, raising prices would immediately hit the fractious coalition's core voters, who are poor and who live on less than the cost of two litres of diesel a day.
The long-term benefit to the country's finances would come from reducing massive spending on subsidies and cutting the 101 million dollars a day in losses that is incurred by state-run fuel retailers like Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum. (ANI)
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