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Benchmark set for fuel price review

New Delhi, Dec. 1: The government’s generosity in the past is keeping your petrol bill high, though the import price has been falling.

The average price of the basket of crude oil India buys has dipped to $53.56 a barrel this November but the national oil companies are expected to consider lowering the domestic rates only when it comes down further to $47.

Compared with that in October, the price of the Indian basket of crude has fallen by as much as $3 a barrel, a senior official of an oil company said.

However, the government’s decision to limit the quantum of domestic price rise last time has prompted the oil companies to make the most of the situation now and offset a part of the losses they suffered when global rates went through the roof.

The price of Indian crude imports was $49 a barrel in June when domestic rates were raised last. The government had then allowed an increase of Rs 2.50 paise per litre on petrol and Rs 2 per litre on diesel. The prices of cooking gas and kerosene were not touched. The oil companies wanted the domestic prices to go up by Rs 4.68 a litre on petrol and a heftier Rs 5.13 per litre on diesel.

But the lower price rise approved by the government meant that oil companies had to bear the brunt of at least 50 per cent of the rise in the import bill.

So, officials say, till the Indian import price comes down to around $47 ' $2 less than the price that triggered the rise ' the oil firms are unlikely to lower the domestic rates.

Petroleum minister Mani Shankar Aiyar, too, indicated as much today in the Lok Sabha, ruling out immediate reduction in prices of petrol and diesel.

Global oil prices have dropped about 20 per cent since their peak in late August, but demand from the rapidly expanding economies of India and China continues to keep the market simmering.

The recent dip in prices is being attributed to low heating demand in the US due to balmy weather. But news of an unexpectedly large drop in US inventories has nudged up the price a bit yesterday.

ATF prices cut

The public sector oil companies today slashed aviation turbine fuel prices by Rs 4,000 per kilolitre as part of the monthly revision to bring them on a par with international prices.

This is for the second month in a row that oil firms have cut prices of jet fuel. On November 1, the prices were reduced by 1.8 per cent.

Jet fuel will now cost Rs 35,978.32 per kilolitre in Calcutta, which is Rs 4,042.48 lower than the November price of Rs 40,020.80. The prices of aviation turbine fuel in Delhi, Mumbai and Chennai will be Rs 31,750.56, Rs 32,564.27 and Rs 34,664.10 respectively. The price variations between the four metros are on account of the different levels of sales tax levied by the state governments.

SpiceJet has decided to pass on the benefit to customers by cutting fuel surcharge by 50 per cent. Fuel surcharge has come down by Rs 200 and Rs 100 on long and short haul sectors, respectively. A few other airlines are expected to follow suit.

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