Crude oil still high, hope prices will come down: FM

Though crude oil price has declined nine per cent compared to month-ago prices, the government sees it as reasonably high.

The Indian basket of crude declined to $103 a barrel as on Monday, compared to $113 a month ago. However, Finance Minister Pranab Mukherjee on Tuesday said he was not fully satisfied with the downward movement in prices of crude from $107 to $102 a barrel, as it is still “reasonably high”. He hoped the price of oil and other commodities would come down further, which would help India manage inflation and also reduce subsidy on oil.

Based on the previous fortnight’s crude oil price, the oil companies currently incur underrecovery of Rs 6.06 on per litre diesel, Rs 23.74 on every litre of kerosene and Rs 247 on a domestic cylinder. On the three regulated products, the oil companies lost Rs 45,000 crore. Based on current underrecovery, they could lose another Rs 66,400 crore in the period from July to March.

Oil Minister S Jaipal Reddy told reporters yesterday that “if the prices globally come down sharply and in a stable way, naturally the prices of petrol will be adjusted downwards”.