Petro prices may be reviewed next month

However, he clarified that in case no picture emerges of prices this month the government may monitor price for a little more time before going for a review.

The decision of the Oil Producing and Exporting Countries (OPEC) to increase production by 7,08,000 barrels per day from July 1 will not soft the global prices petroleum, he said.

He further added that the petroleum ministry is expecting that the prices will remain in the range of $25 to 28 per barrel for next three month when OPEC is meeting to review the price.

Last year, India began importing crude at a price of $10 to 11 per barrel and closed the year at $27 a barrel. This year the country began importing crude at $25 a barrel and the price is hovering around $28 per barrel.

On the question of how much subsidy was being drained towards import of diesel, Narayanan said diesel is being imported at $214 per tonne while it is being offered to refineries at $178 a tonne. In this case, an import price parity of $162 per tonne is being kept for diesel. On the liquefied petroleum gas (LPG) front the government is providing a subsidy of Rs 145 per cylinder.

Even at the current price level of crude, the oil pool deficit would go up to Rs 11,000 crore by the year-end which declined to around Rs 6,000 crore at the end of May. In case the prices went up, the oil pool account deficit would also rise.

Since the government had informed Parliament that the anticipated oil pool deficit at the year-end would be in the range of Rs 11,000 crore, it would not be allowed to go beyond that.

Narayanan said that the government, in close cooperation with the Oil Coordination Committee (OCC) would monitor the price movement from now till June-end and then it would review prices of petroleum products.