Search the Internet          Tips  Sites: Finance, Investment

Govt directs oil PSUs not to hike petro prices

The government is understood to have directed the national oil companies not to hike prices of petrol and diesel at least for two months, provided global crude oil prices remain below $23-24 a barrel.

Oil PSUs have been told to hold back any increase in prices of transportation fuel at least for 2-3 months after the price decontrol starts from April 1, 2002, highly placed government sources said.

The directive is part of the government-PSU consultation on pricing mechanism in the period in which decontrol would take place, sources said, adding a uniform price line is likely to be maintained by these companies.

"The national oil companies will decide on the prices of petrol and diesel in coordination, like it was being done in case of decontrolled naptha and other industrial petro products," they said.

When contacted, the Petroleum Minister Ram Naik said "The government will direct national oil companies to maintain price stability even after dismantling of the Administered Pricing Mechanism."

Naik indicated that sudden spurt in crude oil prices would not be passed on to domestic consumers at least in the beginning of a deregulated era.

"For the time being, the government will facilitate co-ordination between national oil companies to maintain price stability," he said.

Naik said crude oil prices have increased by $3.5 since the presentation of the Union Budget for 2002-03 on February 28.

ALSO READ:
The Rediff Budget Special
Money

Tell us what you think of this report