Moily rules out rollback in petrol, diesel prices

Says only a small raise has been passed on to consumers

Oil Minister M Veerappa Moily today ruled out a rollback in the petrol and diesel rates, saying only a small raise has been passed on to consumers.

"No, No," was his refrain when asked if the government will consider rolling back last week's increase.

"Our country imports 73-75% of oil. We need to pay Rs 7 lakh crore for imports. Where do we find that kind of money," he said.

The first hike in petrol price in over three-and-a-half months and the second rise in diesel rates in one month exclude local sales tax or VAT, making the cost for consumers even higher.

Petrol price in Delhi went up by Rs 1.80 to Rs 69.06 per litre from February 16. Diesel rates went up by 51 paise to Rs 48.16 a litre.

"I think everybody would appreciate that we have not put a lot of burden on consumers. It is only small doses," Moily said.

The increase in auto fuel prices, which comes on the back of a similar small hike in diesel prices last month, is expected to fuel inflation that stood at three-year low of 6.2% in January. There have been demands for a rollback in prices.

"The money (to pay for oil import) can be either found by raising taxes or passing it on to the consumers," he said.

Indian Oil Corporation (IOC), the nation's largest fuel retailer, announced an increase of Rs 1.50 per litre in petrol price as international benchmark oil prices climbed 7.5%.

The diesel rate was raised in line with the government decision to allow oil firms to raise prices in small doses every month till over Rs 10 a litre loss on sale of India's most consumed fuel is totally eliminated.

Even after last week's and a similar hike effected on January 18, oil firms will continue to lose Rs 10.27 a litre on diesel as cost of raw material (crude oil) has risen by 4% to $113.24 per barrel.