New Delhi: A day after oil companies skipped revising petrol and diesel prices despite steep fall in global rates, Petroleum Minister Dharmendra Pradhan today said the state-owned firms will do what is "appropriate".
As per the practice of revising rates every fortnight, state fuel retailers were expected to announce a cut in petrol and diesel prices yesterday as global rates had fallen by about 4%. However, they skipped the revision.
On the previous two occasions when they skipped revising rates, the government had raised excise duty to mop up additional revenue, thereby not passing on the benefit of fall in global oil rates to consumers.
"It (petrol and diesel price cut) is not in our hands," Pradhan said referring to the two fuels as being deregulated commodities whose pricing is decided by oil companies.
"What oil companies feel appropriate they will do," he said at 13th Petro India Conference, organised by India Energy Forum and ORF, here.
The fall in international oil prices should have warranted Rs 3-4 per litre reduction but some of the gains were taken away by depreciation in the rupee against the US dollar.
B Ashok, Chairman of Indian Oil Corp, the nation's largest fuel retailer, said, "We are always keeping track of these things (fall in crude oil prices). We will have to do it (price revision) at the appropriate time." While the fall in global oil rates is a boon for consumers, for oil companies it has meant over Rs 12,000 crore of inventory losses.
The crude oil that is being processed currently in refineries is one that was bought about 6-8 weeks back when rates were higher than present prices. By the time it is processed and marketed its market value would have come down, resulting in inventory losses.
"There is huge drop in crude prices which is having a tremendous impact on our inventories, its a cash loss. We are paying much higher price for the crude and today we are processing the crude at a much lower price and passing it. We are taking our decision based on that and we think we have been doing the right thing," Ashok said.
