Oil prices may drop: Aiyar

Petroleum Minister Mani Shankar Aiyar on Monday hoped that international crude oil prices will ease in the near future and said India was in a comfortable position to sustain prices at around $50 a barrel. 

"We are in a better position to deal with oil prices as we have over 135 billion of foreign exchange reserves. In a sense we can afford to pay higher prices," Aiyar told a CII conference in New Delhi.

Aiyar said with the US elections getting over and winter demand easing, international prices are likely to stabilise, paving the way for a stable domestic fuel pricing policy.

"We had frozen petrol and diesel prices in November and stability in global crude oil prices could see a relatively stable domestic oil pricing regime," he said.

The Indian basket of crude oil late last month had scaled to an all-time high, pushing the country's import bill.

The Indian basket composed of Oman-Dubai soar grade of crude and Brent dated sweet crude in 57:42 ratio, touched $46.23 a barrel on February 28, its highest level ever.

Even during October 2004, the worst month in oil history when the WTI crude oil scaled an all-time high of $56.4 a barrel, the Indian basket was just $43.88 per barrel.

The February average of Indian basket of crude oil was $42.67 a barrel, slightly lower than the October 2004 average of $43.88 per barrel.

In November, it lowered to $38.82 per barrel and further to $36.82 a barrel in December. However, since January, when the Indian basket rose to $41.01 a barrel, the prices have been firming up.