New Delhi: Expressing his helplessness over the hike in the petrol prices, Oil Minister Jaipal Reddy on Friday said that the matter was beyond the control of the government and categorically stated that there would be no rollback for now.
Addressing the media in the national capital, the Oil Minister clarified that the global price was beyond government's control and said that the petrol price hike, which has seen unprecedented protests by the Opposition and the allies, was for the long term gain.
Reddy told reporters, "I have met Finance Minister Pranab Mukherjee today and we have decided to consult state governments too (over the steep hike in fuel prices).” However, he added that the government will watch the situation for a few days.
He further said, "One is aware of the problems caused by these two (petrol price hike and rupee depreciation) massive developments...We at the ministry cannot remain indifferent to your problems."
Understanding the need to find an instant solution to this issue, he said," there is a need for commentators and people to appreciate the decision (petrol price hike)."
Although he maintained that oil marketing companies should not suffer owing to spiraling cost of crude oil in the international market, he emphasised upon the need to re-structure taxes in the state level.
Asked about the opposition to the price hike from within his own party, Reddy said, "The Congress party is also a political party and like all other political parties (it) doesn't want to advocate unpopular causes even if they are unequivocal causes".
"This is politics, not physics," he remarked.
"The government cannot remain indifferent to the people's feelings," he said as the clamour for a rollback from within the Congress party and its allies grew louder.
Oil companies revise petrol prices on 1st and 16th of every month on the basis of average international oil price and the foreign exchange rate in the previous fortnight.
Gasoline price, against which petrol price has been benchmarked, has come down from USD 124 per barrel (that was the basis of Wednesday's steep hike) to USD 117 a barrel.
Rupee has come back from its sub-56 levels to close at 55.37 to a dollar today but is still lower than Rs 53.17 to a dollar that was taken into account for the price hike. If it appreciates further, there will be a scope for price cut.
"I will take a view what trend is likely to be. I want to have a feel (of lower oil prices first)," Reddy said. "Rupee has depreciated steeply. We dont know when it will stop. Therefore I would like to watch (for sometime)."
Asked about the timing of the price revision which the oil companies avoided on the eve of assembly elections in five states including Uttar Pradesh and announced it only after the government got Budget passed in Parliament, he said, "Is there a good time for increase in price? There is no good time".
Reddy said while the decision to increase the price was "harsh and unpleasant", the hike was warranted due to the poor financial state blue chip oil companies had landed into.
Reddy said his ministry has been seeking a meeting of the high-powered ministerial panel to decide on price of diesel, domestic LPG and kerosene but no dates have been fixed yet.
The Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee has not met in nearly a year.
State-owned oil companies currently lose Rs 512 crore per day on selling diesel, domestic LPG and kerosene. Diesel is currently sold at a loss of Rs 15.35 a litre, kerosene at Rs 32.98 per litre loss and oil firms lose Rs 479 on sale of every 14.2-kg domestic LPG cylinder.
The three firms had together lost Rs 138,541 crore in revenue in 2011-12. This year they are projected to lose a record Rs 193,880 crore.
"They (PSU oil companies) are among world's Fortune companies. They are our bluechip companies at the global level. We cannot allow their image to be adversely affected at any cost," Reddy said.
"Therefore oil marketing companies feel desperate (when they bleed from selling fuel below cost). So do we," he said. "This decision is unpleasant and harsh (but) was taken by oil marketing companies".
But the government at this point cannot take a view on forcing a price cut due to uncertainty about where international oil prices and rupee-dollar rate will settle, he said.
Reddy said the both Centre and the state government should cut taxes to reduce burden on the common man.
While the Centre earns Rs 14.78 from sale of every litre of petrol, the state governments pocket between Rs 12.20 to Rs 19.83 per litre.
Roughly 40 percent of the petrol price is made up of central and state taxes.
He proposed joint consultations between the states and centre to reduce taxes on not just petrol but also diesel.
With PTI inputs
First Published: Friday, May 25, 2012, 13:06