Price hike marginal, govt loss colossal: Oil Min

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The government has hiked petrol prices by Rs 5 per litre, diesel by Rs 3 per litre and LPG price hiked by Rs 50 per cylinder.

Petroleum Minister Murli Deora  feels that the price hike is not steep. The steeped price is not more than market price, he said. The amount of money the government is losing is colossal, he added. He feels that if crude prices touch USD 130 per barrel; the Indian economy will get affected.

Excerpts from CNBC-TV18's exclusive interview with Murli Deora:

 

Q: Would you describe the hike as steep?

 

A: It's not a steep price, it's not more than market price. The amount of money the government is losing is colossal. We have increased the price of diesel by Rs 3 (per litre); we are losing more than Rs 20 a litre in that. We have increased the price of petrol by Rs 5 (per litre); we are losing Rs 17-18 (per litre) on this also. If somebody is driving a Mercedes and using diesel, we are giving him Rs 15 a litre subsidy.

 

Q: What about the inflation impact of diesel that was a concern?

 

A: There may be price increase but we have to fight with it. This is what we are doing with the campaign; the Prime Minister is addressing the nation. He has not done such things. But when the crises are really there and when the oil price goes to USD 130 per barrel; we will have to take care of that. Otherwise our economy will get affected.

 

Q: In terms of bonds: the Finance Minister said they will issue about Rs 95,000 crore. The gap is now Rs 1,35,000 crore, which will be filled by bonds? Will you review this bond situation quarterly?

 

A: Yes we will review it quarterly; about Rs 245000 crore and 50% of that -government has committed. But right now, there is no need. In the performance of this quarter and next quarter, we will decide whether the quantum of bond is more or less.   

 

Q: Do you think the RBI is going to give sufficient liquidity. You do not need statutory liquidity ratio (SLR) status - basically that's what you are saying?

 

A: We would like to have SLR from our way but RBI has not agreed yet.

 

Q: The Left have consistently opposed price hikes. They have also talked about levying windfall profit tax on private refineries. What about those proposals and the Left on bode?

 

A: I spoke to Mr. Karat on various issues. He was saying that some oil refineries are making windfall profit. If they are making windfall profit we should give them some reward.

 

Q: I think he was talking about Reliance?

 

A: Yes. Reliance has its refinery in Jamnagar; they are importing oil in Jamnagar, processing it and sending back from Jamnagar.

 

Q: Are you in favour of that?

 

A: 100% in favour. They are making so much money, they are giving income tax to us, people get jobs there and country is getting advantage from that.

 

Q: Some people are already talking about rollback?

 

A: I do not think there will be rollback.