Can’t keep changing fuel prices on knee-jerk basis: Petroleum Minister Dharmendra Pradhan

"The government will not interfere in the day-to-day functioning of the OMCs... for the last three years, the pricing mechanism has been linked to the market," Pradhan said

By: Express Web Desk | New Delhi | Updated: September 13, 2017 8:21 pm
Dharmendra Pradhan, Petroleum Minister Dharmendra Pradhan, Petrol Prices, Fuel Prices, Dharmendra Pradhan Petrol Prices, Dharmendra Pradhan Fuel Prices, Business News, Latest Business News, Indian Express, Indian Express News Dharmendra Pradhan

With stocks of state-run oil marketing companies (OMCs) tanking by as much as eight per cent following recent hikes in transport fuel prices, Petroleum Minister Dharmendra Pradhan said on Wednesday said the government cannot change fuel prices on a knee-jerk basis.

“The government cannot change fuel pricing on a knee-jerk basis,” the minister said noting that global crude oil prices had recently gone up as much as 15 per cent owing to production being hit in the US owing to the impact of multiple hurricanes. “The government will not interfere in the day-to-day functioning of the OMCs… for the last three years, the pricing mechanism has been linked to the market,” he said.

Pradhan also said that despite hurricanes Irma and Harvey hitting refinery production in Texas, USA, by as much as 13 per cent, he expects global crude prices to ease in the near future. He said the international prices of petrol and diesel have recently gone up by 18 per cent and 20 per cent, respectively.

The Indian basket of imported crude oils gained nearly $3.50 a barrel during last week even as petrol prices in the country touched their highest levels since Prime Minister Narendra Modi assumed office three years ago, official data showed on Monday.

The Indian basket, comprising 73 per cent sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent, closed trade on the weekend on Friday at $53.63 per barrel. The oil basket had gained over a dollar at the start of last week on Monday to close at $51.34 for a barrel of 159 litres.

Meanwhile, under the daily revision of fuel prices, petrol in Mumbai on Monday cost Rs 79.41 a litre, breaching the level it last touched in August 2014. Petrol per litre on that day cost Rs 70.30 in Delhi, Rs 73.05 in Kolkata and Rs 72.87 in Chennai.

Petroleum products do not come under the Goods and Services Tax (GST) and prices vary at locations according to state taxes. “GST is the only way to have a rational price mechanism for petroleum products.. the industry has been demanding it and Finance Minister Arun Jaitley (who heads the GST Council) is very interested to have it,” Pradhan said, pointing to the substantial difference in prices between Delhi and Mumbai, for instance, on account of local taxes.

Pradhan also said that the decision on reducing the cess on petroleum products rests with the Finance Ministry, adding that this revenue, however, allowed the government to increase social sector spending. With crude oil prices plunging last year, the government levied cess on petrol in order to mop up extra revenue for the exchequer.

(With agencies input)

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  1. V
    Vasant khade
    Sep 14, 2017 at 12:35 pm
    How many days government looted people
    1. M
      Sep 14, 2017 at 12:01 pm
      Yes till the Ambani's say price's can be reduced, nothing is going to change , ministry is just under the control of oil conglomerates, so the poor and middle class will always be the sufferers , prices have come down in other countries, nothing will change in India
      1. T
        Sep 14, 2017 at 3:43 am
        Petroleum minister is not there to say that his ministry can not interfere in the oil cos pricing. He should interfered to ensure public is not put to suffer like this
        1. Barb Dewyre
          Sep 14, 2017 at 2:20 am
          This government is quick to take credit but is even faster to deflect blame for anything that their pinhead brains cannot comprehend. Is the nation in safe hands? They had a windfall gain of $90 billion because of cheaper international crude prices. Where has that money gone? They claimed that they have funded infrastructure prices. Has anybody seen any positive changes?
          1. Prasanta Mishra
            Sep 14, 2017 at 2:15 am
            Petrole is costlere,no problem use water it is free.
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