New Delhi, Feb. 22: The Indian basket of crude crossed the psychological $100-per-barrel mark over fears of supply disruption in the wake of the political turmoil in West Asia. However, the government ruled out any immediate hike in the prices of petroleum products.

Oil minister S. Jaipal Reddy has also ruled out any hike in the price of petrol, which is decontrolled.

“We are watching the situation closely … if it spreads to other nations in the region it would have serious implications on the oil import bill,” oil ministry officials said.

Brent crude prices spiked to over $107 per barrel as concern grew that the violence in Libya, a member of the Organisation of the Petroleum Exporting Countries (Opec), could lead to wider supply disruptions. The country imports about one million tonnes of crude from Libya.

The Indian crude basket, which comprises Oman-Dubai sour grade crude and Brent dated sweet crude in a 62.3:37.7 ratio, touched $101.67 a barrel yesterday.

Sources said oil companies were under pressure to avoid a petrol price hike, and the periodic revision of petrol prices was on hold for now. Any hike in prices would contribute to rising inflation.

“If the situation in the region deteriorates, it would further spike the global oil prices and domestic prices would be hit. There are fears that it could cross the pre-crisis level of $147 a barrel, burdening the fiscal deficit and impacting the inflation mitigating mechanisms of the government,” N.R. Bhanumurthy of the National Institute of Public Finance and Policy said.

Oil marketing companies are reeling under cumulative losses of Rs 450 crore per day because of selling fuel products at prices below cost. The state-owned firms are incurring a loss of Rs 2.8 per litre on petrol prices, Rs 9.55 per litre on diesel prices and Rs 20.57 per litre on kerosene prices. The loss on LPG is pegged at Rs 356.07 per domestic LPG cylinder.

Minister of state for petroleum and natural gas R.P.N. Singh said, “Oil companies have increased the price of petrol (deregulated in June last) only by 13.5 per cent against the rise in petrol prices of 36 per cent in the international market, thereby absorbing a part of the increase in global oil prices themselves.”

Analysts said if the government did not go for a price hike, the finance ministry would have to compensate the oil companies and this would increase the government’s fiscal deficit.

“For the full fiscal, the three refiners are projected to lose Rs 76,559 crore in revenues at current prices,” officials said. For the first nine months, the finance ministry has approved the release of a cash compensation of Rs 21,000 crore to the three state-run fuel retailers.

To tackle the difficult situation, the government might restructure the oil duty in the budget, sources said. At present, the customs duty on crude is 5 per cent, while the duty on petrol and diesel is 7.5 per cent. The excise duty on petrol is Rs 14.3 per litre and Rs 4.65 per litre on diesel. The government also charges Rs 1 per litre cess on diesel and petrol.

Kalpana Jain, energy analyst with Deloitte Touche Tohmatsu India, said, “Rising oil prices will put a strain on the government’s finances and restrict headroom for more spending in critically important areas such as infrastructure, education and health.”