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Oil Minister Pradhan says no directive from govt to defer price hike

Press Trust of India  |  New Delhi 

Minister today said the government has not asked firms to defer raising the of petrol and diesel ahead of elections in

Incidentally, firms after keeping rates unchanged for a day, today cut petrol price by 4 paisa per litre and by 3 paisa in case of diesel despite firming international rates.

The prices at petrol pumps of state-owned fuel retailers like Corp (IOC) were cut by 1-3 paisa every day in the first fortnight of December last year and rates started moving up immediately after polling for assembly elections in concluded on December 14, leading to speculation that government may have asked companies to hold on to the prices.

"There is no such direction (to hold price hike)," told reporters here.

He said government has freed fuel pricing in a bid to bring competition and there is no going back on it.

"It is well planned strategy of government that companies are fixing the fuel prices on the basis of international prices. If we dont bring competitor in the long term, then there would be no solution. Government has given freedom to companies," he said.

said companies heads had yesterday stated that they have not got any direction from the government.

"There are no directions from government to them," he said.

The government reportedly had informally directed state-owned fuel retailers not to raise petrol and diesel prices in the run-up to the December 2017 assembly elections in By some accounts, as much as 45 paisa increase warranted in petrol and diesel rates was not passed on.

This time around IOC, (HPCL) and (BPCL) have reportedly been asked to absorb up to Re 1 a litre hike.

"No, we haven't heard from the government anything (on dropping daily price revision)," IOC had stated yesterday.

HPCL and Managing Director M K Surana too said the company is not aware of any directive to companies not to pass on the rise in international prices.

The government had in June 2010 freed petrol price from its control and the diesel rates were deregulated in October 2014. Prices have since then moved more or less in tandem with international rates barring a few exceptions like the period before a crucial election.

State-owned companies in June last year dumped the 15-year old practice of revising rates on 1st and 16th of every month and instead adopted a dynamic daily price revision to instantly reflect changes in cost.

Incidentally, companies did not change rates at their pumps yesterday. Today, petrol price was cut by 4 paisa to Rs 73.94 a litre, while diesel rate was cut by 3 paisa to Rs 64.93.

After hitting a low of USD 27.1 per barrel in 2016, Brent crude is currently trading around USD 70 level.

had last week ruled out any immediate reduction in excise duty to cushion the increases warranted from rise in international price.

The BJP-led government had raised excise duty nine times between November 2014 and January 2016 to shore up finances as global prices fell, but then cut the tax just once in October last year by Rs 2 a litre.

The government had between November 2014 and January 2016 raised excise duty, taking away gains arising from plummeting global prices.

In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government's excise mop up more than double to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.

The central government had cut excise duty by Rs 2 per litre in October 2017, when petrol price reached Rs 70.88 per litre in and diesel Rs 59.14. Because of the reduction in excise duty, diesel prices had on October 4, 2017 come down to Rs 56.89 per litre and petrol to Rs 68.38 per litre.

However, a global rally in crude prices pushed domestic fuel prices far higher than those levels.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, April 12 2018. 17:50 IST
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