Fuel price hike put on hold, OMCs decline
The fuel price hike, which was expected in the next few hours, have been put on hold. Oil minister Jaipal Reddy confirmed to mediapersons on Friday that there is no immediate proposal to hike prices of petrol, diesel and LPG.
September 07, 2012 / 13:19 IST
The fuel price hike, which was expected in the next few hours, have been put on hold. Oil minister Jaipal Reddy confirmed to mediapersons on Friday that there is no immediate proposal to hike prices of petrol, diesel and LPG.
Oil marketing companies, which had rallied over 1% in the morning started declining with the news and bond yeilds moved up. HPCL, BPCL went down 3% while IOC declined 1%.See how the OMS stocks reacted.Below is the edited transcript of Reddy’s interview with CNBC-TV18. Q: There is a lot of anticipation that the prices of petrol will atleast go up today, is the oil companies going to hike their price today?A: There are no immediate proposals with regard to the prices of various oil products including petrol.Q: So the prices will not go up today?A: We are facing a tremendous crisis of unprecedented magnitude. However, there are no immediate plans.Q: You have floated a cabinet note for hiking the diesel and LPG prices, isn’t it?A: Cabinet note is different from a step to be taken today or tomorrow. It is my duty as a minister to bring the set of facts to the notice of cabinet committee and political affairs.Q: So when is the cabinet going to meet to discuss that?A: I have no idea.Q: What exactly are you proposing will be a way out of this entire conundrum because you have been saying time and again?A: Our companies will lose around a huge figure called Rs 2 lakh crore yearly. I cannot hope to wipe out the entire deficient. There is however a need to reduce its deficient. Q: But petrol is a free product, isn’t it? Government has no control, so is the government also going to intervene in the petrol pricing also?A: We have not been intervening. There is tremendous volatility in the price of oil and in the value of rupee. However, we will have to take some difficult and painful decisions; we are not taking them immediately.Q: Given the fact that you have always maintain that hiking of diesel prices is politically sensitive, any kind of consensus across the board that you are seeking, any progress on those?A: I think consensus is required in this country; this is a classic case of politics defeating economics.Q: You have floated a cabinet note, any indications on it yet, when the union cabinet etc is likely to take that up?A: I have taken the initiative. It is for the cabinet secretary to decide.Q: But oil companies are free to hike atleast petrol prices, isn’t it?A: They have always been free.Q: The Kelkar Committee is talking about Rs 4 per liter hike as far as petrol goes, LPG Rs 50, what is your view?A: I refuse to comment on freely floating ideas.Q: Is there any communication from the finance ministry that they cannot continue subsidizing oil marketing companies in the long run?A: Nothing more. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
