The Telegraph
Since 1st March, 1999
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Naik signals reduction in petro prices

New Delhi, April 9: Petroleum minister Ram Naik today said that if the current trend of declining international crude prices continued, then the national oil companies may reduce prices of petrol and diesel.

The minister said that while international prices of crude oil had risen in the run up to the Iraq war, they fell once the war started. International prices for the Indian crude basket had touched a high of $ 32.56 per barrel in the first fortnight of March, he added. This price had fallen to a low of $ 23.53 on April 7 and is now hovering at $ 24 per barrel.

The prices of petrol and diesel were increased through three consecutive fortnightly revisions preceding the war.

Oil company officials said international crude prices were ruling at $ 31.67 per barrel when petrol and diesel prices were last increased. However, the entire increase had not been passed on to the consumers as the oil companies had decided to shoulder part of the burden.

It now remains to be seen whether they will pass on the benefit of the current fall in global crude prices to consumers or choose to hold the price line for a while to make up for the earlier loss that they had borne, the officials added.

Naik said the country’s oil import bill for the fiscal ended March 31, 2003 has risen by almost 24 per cent to Rs 84,017 crore compared with Rs 67, 646 crore during the previous corresponding period.

Another factor that could reverse the declining price trend is the Opec cartel’s move to review its decision to increase crude production in the wake of falling prices. Opec members are in favour of maintaining crude prices in $ 25 to $ 28 per barrel price band.

Naik said that Opec should take an overall view of the picture “because for countries like India a price band of $ 20 to $ 22 per barrel was comfortable.”

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