Ministry mounts pressure for petro price hike

At the same time, the finance ministry made it clear that the goverment was not contemplating any change in the duty structure on petro products at present.

Customs and excise duty structures on crude petroleum and petroleum products were revised in this year’s budget on the basis of recommendations of an advisory group and in consultation with the petroleum ministry, Minister of State for Finance S.S. Palanimanickam told the Lok Sabha in a written reply. At present, there is no proposal to review the customs duty structure on petroleum products, he added.

Meanwhile, Petroleum Minister Mani Shankar Aiyar today hinted at a revision of prices. Talking to reporters in Bhatinda he said, ‘‘The rise in international prices warrant an increase in retail prices. We are trying to balance between consumers’ interest, saving oil firms from bankruptcy and keeping fiscal deficit under control. It is possible that a small burden may be passed on to the consumers,’’ he said.

‘‘All the facts relating to the burden on oil companies consequent to the rise in global prices have been placed before the Cabinet. In addition, I have personally written to the Prime Minister and the finance minister appraising them of the situation,’’ Aiyar said. ‘‘Least possible burden will be passed on to consumers,’’ he said.

The petroleum ministry has urged the Cabinet to increase domestic fuel prices keeping in view the unprecedented surge in global prices and argued that all state-run oil marketing companies including IOC, BPCL, HPCL and IBP will turn sick if prices were not raised, official sources said.

According to the ministry’s estimates, IOC’s subsidiary IBP will be the first to turn financially sick by as early as next month as losses arising from freeze on fuel prices will erode its net worth. BPCL will turn sick in just over a year from now and HPCL will take just 20 months to be referred to the BIFR, Petroleum Secretary S.C. Tripathi had written to Cabinet Secretary B.K. Chaturvedi earlier this week.

Oil surges above $67

LONDON: Oil prices raced to record highs above $67 a barrel on Friday as investors fretted over the world’s strained capacity to refine and pump crude oil. US oil rose more than 7 per cent this week and has climbed 51 per cent since the start of the year. The stage could be set for further gains, with no let-up seen in global demand growth and no signs that $60-plus oil is harming the US economy. US light crude settled $1.06 higher at $66.86, off the record $67.10 a barrel hit earlier in the day. London Brent crude settled $1.07 higher at $66.45. Reuters