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Oil firms to decide on petro prices: Naik

The government on Friday said that it will not dictate petroleum product prices in the deregulated scenario but oil companies have been asked to fix retail selling prices keeping consumer interests in mind.

"Government does not come into the picture (of fixing retailing selling price of petrol and diesel) at all. We do not deal with increase or decrease in prices," Petroleum Minister Ram Naik told a news conference in New Delhi.

He, however, did not confirm or deny the move to increase petrol prices by Rs 2.50-3.00 per litre and diesel by Rs 1.50 per litre following hardening of global crude oil prices.

"They (oil companies) are free to take prudent commercial decisions," he said.

Asked about the nearly Rs 10 billion losses suffered by oil PSUs in April on account of selling products at cost below the crude price, Naik said, "our oil companies are big with deep pockets. They can sustain small losses here and there."

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.

The government had not issued any instruction to oil companies not to increase petro prices, Naik said. "We only told them that we are making a major changeover to a deregulated scenario. In such cases caution should be exercised and consumer conveniences should be borne in mind while deciding on crucial issues like pricing."

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