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Petrol, diesel price hike unlikely
August 27, 2004 15:55 IST
The government is unlikely to hike prices of petrol and diesel at the next revision due on August 31 despite the surge in crude oil prices.
"At a time when inflation is creeping up to 8 per cent, a responsive Government has to give priority to holding the price line," Petroleum Minister Mani Shankar Aiyar said on Friday.
Despite the government cutting duties this month to check the impact of rising crude prices on domestic market, global oil prices have gone up further necessitating a hike of Rs 0.30 per litre in petrol prices and about Re 1 per litre in diesel prices on the next fortnightly revision.
Aiyar said the international oil prices were soaring despite sufficient quantities available to meet demand. "We need to keep a very close watch on the movement of global oil prices and calibrate our response. Unless we are able to insulate domestic consumers against volatilities, our economy could be in danger."
"We have to be very careful and not panic," he said.
The petroleum minister said the price of the basket of crude India buys from international market had risen by more than $12 a barrel during the past 7 months. This hike is almost equal to the surge in price of Indian basket of crude in 7 years to December 2003, when the previous NDA government froze retail prices.
"During the past 7 years, petrol prices have risen from Rs 16 to Rs 33, while during the past seven months prices have gone up by just Rs 3 per litre. This shows that the Congress government is much more efficient in insulating the domestic consumers from the volatilities in international market," he said.