Oil minister rules out review of daily fuel pricing mechanism

Dahej:Oil Minister Dharmendra Pradhan ruled out a daily price review of petrol and diesel, but said the government was concerned about increasing fuel prices and is working on a long-term solution.

He asked state governments to tax petrol and diesel within a “reasonable and responsible” band and not continue to reap a bonanza from rising oil prices.

“There is no review of daily price mechanism,” he said after an event to mark the receipt of the first LNG cargo from Russia under a long-term contract.

Daily revision in petrol and diesel prices, which was introduced in mid-June last year, had come under criticism after rates were hiked everyday last month in step with firming international oil rates. It was speculated that the long-term solution being worked out by the government to deal with the volatility may involve review of the daily price review mechanism.

Pradhan said fuel prices have started to decline during the five days but the rates continue to “pinch”.

After hitting all-time high of Rs 78.43 a litre for petrol and Rs 69.31 for diesel on May 29, rates have marginally fallen during the subsequent days on softening in international oil prices and rupee strengthening against the US dollar.

Petrol price has dropped by 47 paisa a litre and diesel by 34 paisa. This compares to Rs 3.64 a litre hike in petrol and Rs 3.24 a litre hike in diesel rates in Delhi in the fortnight after state-owned oil firms ended a 19-day pre-Karnataka poll hiatus to resume daily price revision on May 14.

Petrol in Delhi currently costs Rs 77.96 and diesel by Rs 68.97. Prices in Delhi are the lowest among all metros and most state capitals due to lower sales tax or VAT.

“We are thinking of a long-term solution (to price volatility). We are concerned about prices,” he said. “Government of India is taking a holistic view.”