New Delhi, Nov. 6: Petroleum minister Murli Deora today said the government was examining the impact of the fall in prices of global crude on the oil companies, to see if there was any scope of reducing the prices of petrol and diesel.

“We are working out the arithmetic to see if there is scope for any reduction,” he said. “We will be very happy to reduce prices but first we have to examine the impact of the fall in international prices. We have to see as to what extent the fall has helped us cover the loss on fuel sales,” Deora said.

Senior officials of the Indian Oil Corporation (IOC) were, however, sceptical about the possibility of a fall in prices. They said IOC was still losing Re 1 per litre on the combined sales of petrol and diesel.

The oil companies charge more for petrol to subsidise use of diesel which is used in public transport and farms.

The companies make a profit of Rs 4.50 per litre on petrol and a loss of Rs 1.55 per litre on diesel. Since sales of diesel are four times more than petrol, there was a net loss on combined sales, the officials said.

This apart, the companies are also losing Rs 151 on every LPG cylinder and Rs 14 on a litre of kerosene.

Deora said a decision on reducing petrol and diesel prices, raised by Rs 4 a litre and Rs 2 a litre respectively on June 5, would depend on the amount of oil bonds issued by the government to the oil companies to compensate for losses on the sale of LPG and kerosene and the extent to which upstream companies such as ONGC bear the losses of the oil companies.

The government will issue bonds worth Rs 28,300 crore to the oil companies in this fiscal, with the first tranche of Rs 5,000 crore released last month.

Global prices fall

World crude prices dipped today in a technical retreat after spiking higher late last week, following threats against oil installations in key producer Nigeria, dealers said.