Sinha, Naik discuss hike in oil prices

Finance and petroleum ministries began the exercise to review excise duties on petroleum products following the more than $5 per barrel increase in global crude oil prices. Petroleum Minister Ram Naik held discussions with Finance Minister Yashwant Sinha on the impact of the surge in global crude prices on domestic product prices and ways to mitigate hardships of oil companies that are incurring a loss of Rs 75-80 crore per day on account of selling products below the cost of crude.

“We have just discussed the impact of international crude price hike on domestic product prices and oil companies,” Naik said after a 50-minute meeting with Sinha. State-run oil retailing companies are selling petrol at a loss of Rs 4 per litre and diesel at Rs 3.43 per litre as crude oil price has increased to over $25 per barrel as against the $20 a barrel budgeted at the time of last petroleum product price review. Meanwhile, oil prices fell on Thursday as Israel ended a siege of Palestinian headquarters in Ramallah, easing fears of a spread of violence and potential supply disruptions from the oil-rich Middle East. North Sea Brent crude dipped 40 cents to $25.47 a barrel while US light crude slipped 43 cents to $26.32 a barrel.

Oil prices have shed more than $1 a barrel since Tuesday as Israel withdrew its forces from several areas in Palestinian territory following a month of incursions to halt a wave of Palestinian suicide bombings.