Oil Minister S Jaipal Reddy on Friday underlined the need for having a relook at petroleum product prices, but said the government is not contemplating decontrol of diesel rates just yet.
New Delhi: Oil Minister S Jaipal Reddy on Friday underlined the need for having a relook at petroleum product prices, but said the government is not contemplating decontrol of diesel rates just yet.
"The prices of all petroleum products need to be looked at again. However, we live in a real world, not only in numbers," he told reporters on the sidelines of 7th Asia Gas Partnership Summit here.
Oil firms sell diesel, domestic LPG and kerosene at government-controlled rates which are way below the cost. Even petrol, which was deregulated in June 2010, continues to be sold at around Rs 7.70 per litre less than its actual cost.
"As of now, we are not contemplating deregulation of diesel prices," Reddy said.
State-owned oil companies will need to raise diesel price by Rs 14.73 a litre if the government were to free its pricing, like it was done in case of petrol in 2010.
"There is some kind of discontinuation of deregulation in petrol prices," he said.
"But we have no intention of bringing regulation back."
Oil companies have demanded that since they have not been able to raise petrol price in line with increase in cost, they be compensated by the government for the Rs 4,500-crore loss they incurred on fuel sale. At present, the government compensates oil firms for losses only on diesel, domestic LPG and kerosene.
"Oil companies have no doubt suggested some measures. But the Petroleum Ministry does not have independent (decision making powers on it). I will take up the issue at Empowered Group of Ministers at the appropriate time," Reddy said.