No rollback of fuel prices hike: M Veerappa Moily

Petroleum and Natural Gas Minister M Veerappa Moily on Monday said there was no proposal to roll back the hike in petrol and diesel prices. The government had effected only a small hike in the prices of petroleum products and consumers will have to bear it, he said.

After the signing of a gas transmission agreement between GAIL (India) Ltd and Karnataka Power Corporation Limited, here, he said, “Our country imports 73-75 per cent of oil. We are paying Rs 7 lakh crore for the imports annually. Where do we find that kind of money, if we don’t raise prices?”

Prices of petrol were raised by Rs 1.50 a litre and diesel prices by 45p per litre last week.

“I think everybody would appreciate that we have not put a lot of burden on consumers. It is only in small doses. The money to pay for oil imports can be either found by raising taxes or passing on to the consumers,” Moily said.

The government had decided to deregulate diesel prices from state control and authorized oil marketing companies to raise prices in small quantity.

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

Moily said the ministry would soon announce new Shale Gas Policy. “We have already finalised the policy and circulated the draft to all ministries and it has come back with their inputs. We have circulated a Cabinet note on the same and the Cabinet is likely to approve the policy draft in the next meeting. And within a month, we will announce the policy.”

The government is also revising coal bed methane (CBM) policy and that will also be announced within a month, he added.

Stating that the proposed Kochi-Mangalore gas pipeline project has run into rough weather due to delay in land acquisition, Moily said the ministry was thinking of extending the Dabhol-Bangalore gas pipeline between Chitradurga and Mangalore. “We will branch off from Chitradurga on the Dabhol-Bangalore pipeline. GAIL has already conducted the base line survey and the project would be taken up very soon,” he said.

In order to maximize the utilization of gas by states, Moily said GAIL would soon convene a meeting of the chief minister of Maharashtra, Karnataka, Goa, Kerala and Tamil Nadu. The states need to maximize the gas utilization and work out a detailed mechanism for the same, he said.

GAIL (India) Limited Managing Director B C Tripathi said the company would start supplying 40 per cent of the newly laid gas pipeline between Dabhol and Bangalore within two years. “If required, we can increase the supply of gas in two years time as and when the demand goes up.”

GAIL has completed the 1,000 km long gas pipeline between Dabhol in Maharashtra and Bidadi near Bangalore at an investment of Rs 4,500 crore. The pipeline provides natural gas supply to parts of Maharashtra, Goa and Karnataka along its route.