No roll back in petro prices — Naik

"No rollback," he told PTI when asked if the government would consider revising downward the prices of petroleum products in the face of stiff opposition from Trinamool Congress and resignation of Mamata Banerjee from the Union Cabinet.

On NDA’s meeting prior to government deciding on hiking petroleum product prices to bridge the burgeoning oil pool deficit of Rs 23,600 crore, Naik said Mamata Banerjee was present during the meeting on Saturday last but declined to comment on her resignation.

"It is for Prime Minister and NDA convenor to talk to her. Decision to hike prices was taken after discussions with Finance Minister, Union Cabinet and National Democratic Alliance," he said.

Naik, however, assured that petro-product prices would be brought down if international crude prices came down to sustainable level of $22-23 and oil pool deficit was wiped out.

Asked if he foresaw a dip in global price below $30 a barrel, Naik said "no. Not in immediate future." On criticism by Congress and Left Parties, Naik said "there are some issues which are beyond politics. Oil price hike should be seen in view of changes in international market conditions and should not be politicised."

Naik said government had the target of dismantling administrative price mechanism by April 2002 and he would try to accomplish it. As per the earlier Cabinet decision taken by the United Front Government in 1997, subsidy on cooking gas was to be contained to just 15 per cent while on Kerosene to 30 per cent, he said and pointed out that the previous government did not take any steps towards phasing out subsidies as per the dismantling of APM in a phased manner by April 2002.

Prior to the hike in prices on September 30, subsidy on LPG was Rs 171 per cylinder, on Kerosene – Rs 8.21 per litre, and on Diesel – Rs 5.29. Ex-storage prices of these products were hiked by Rs 31, Rs 2.50 and Rs 2.30 respectively.

Before the hike, subsidies on these products was estimated at about Rs 32,000 crore a year, part of which was being managed through cross subsidisation from petrol, ministry sources said.

The remaining subsidy level of these products even after adjusting the ex-storage price hike would still leave the subsidy at a whopping Rs 20,000 crore a year, sources said.

Petroleum Ministry officials said the government had put a price cap of Rs 5570 a tonne on domestic crude from Oil and Natural Gas Corporation and this measure was helping them save another Rs 10,000 crore towards subsidy.