The sudden spike in crude yesterday had sent a shock-wave across global economies. Has the time come to raise petrol prices? Perhaps, but state-run oil retailer IOC says it will wait for budget before raising petrol prices. Speaking to CNBC-TV18 managing editor Udayan Mukherjee, IOC director finance SV Narasimhan said petrol under-recovery is still at around Rs 2 per litre. At present, Indian crude basket is at $112/bbl and average import price for crude stands at USD 110 to USD 111 for Indian companies. "The estimated under-recovery is at Rs 80,000 crore," he said.
Asked about expectation from Finance Minister Pranab Mukherjee in the forthcoming budget, Narasimhan said he was looking forward to a excise and customs duty cut. "The 5% customs duty on crude needs to be rolled back and I am hoping to receive cash subsidy." He ruled out a follow-on public offer of IOC at the moment, but is willing to take a call in FY12. Below is the verbatim transcript of SV Narasimhan's interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying videos. Q: Let us start with petrol, when are you raising prices of petrol and what is the current underrecovery on petrol? A: We have been giving the prices time and again for petrol. We will definitely wait for the outcome of the budget. We hope that the government will do some rationalization of taxes and duties. Based on that, we will take a call in the month of March to what extent the price should go up. Q: Why would you wait for the budget in order to increase petrol prices, on that you have freedom in pricing? A: I meant to say, this pricing also has got the clutter of the customs duty on the petrol as well as excise duty. If there are reductions in that then the impact of those reductions will be factored. That is why, we leave it for the budget and then we will take a call in the month of March. Q: What are the product wise underrecoveries at this point given the Indian basket of crude? A: As of today, the underrecovery on diesel is about Rs 9.55 paisa, kerosene is about Rs 20.56 paisa and LPG is about Rs 356 per cylinder. This is underrecovery for the second fortnight of the February. Definitely, I expect these prices - the underrecovery to increase when we go for revision on March 1. We will have to wait and see. It will be definitely more than what it is today. Q: You didnDiscover 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!
