Will review petrol prices on June 15: IOC

Amidst protests and bandhs against the recent hike,  government rolled back petrol prices by Rs 2 on Saturday. However, this may not be the end of woes. PK Goyal, Director-Finance of IOC says that oil companies will keep adjusting rates and will review petrol price again on June 15.

In an interview to CNBC-TV18, he explained, "Petrol price is not linked with crude, it is linked with petrol prices in the dollar exchange rate. So we will review the position on fortnightly basis only."

Goyal adds that currently there is no over or under-recoveries on petrol. "When we had increased prices, since then crude prices have fallen from USD 124 to USD 115 but exchange rate has increased from USD 53.17 to 54.96. So as an affect of both the items, we are able to reduce the Rs 1.68 at Delhi and now we have no under recovery and over recovery," he elaborates.

Brent crude oil prices fell for a fourth straight day on Friday, dropping under USD 100 a barrel to a 16-month low.

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Below is an edited transcript of his interview with Mitali Mukherjee and Sonia Shenoy. Also watch the accompanying video.

Q: Was this done primarily on the back of crude prices softening out, and does this Rs 2 cut adequately reflect the kind of cool off that’s been in crude?

A: Since the time we had increased prices, crude prices have come down from USD 124 a barrel to USD 115 a barrel. The exchange rate, however, has increased from 53.17 to 54.96. As the effect of both items, we are able to reduce prices by Rs 1.68 at Delhi and now we have no under recovery and over recovery.

Q: Brent had actually slipped below USD 100 by the end of last week, it’s down almost 8%. How soon will the oil marketing companies (OMCs) be reconvening in order to take a decision on whether there should be even more of a scale back on petrol prices?

A: We have just mentioned that we are reviewing these prices on fortnightly basis. We will review the position on 15th of this month and then only we will take a further decision.

Q: How much of this cut back is courtesy crude prices and how much of it is courtesy political pressures, because not just the opposition but even allies of the government have now put pressure with regards to the petrol prices?

A: No, there is no pressure from anybody. This is based on the commercial decision, this is based on fortnightly revision in the prices of petrol, which is a decontrolled product.

Q: The last time we spoke with your peers there was an indication that there could be a package perhaps by the government to target the under recovery situation, perhaps some reduction in duties etc. Have you had any talks with the government at all to indicate in this matter?

A: No we have not heard anything. But as petrol is a decontrolled product, we have taken the decision in petrol only. Other three products are controlled, so the government has to take a decision accordingly.

Q: How are things in terms of an under recovery on the other products, diesel, etc?

A: For diesel, the under recovery is Rs 12.53, SQ is Rs 30.53 and on LPG Rs 396 per cylinder.

Q: Even if there is a sharper fall in Brent prices, you are not likely to move on petrol prices till the 15th of June which is when you reconvene?

A: See the petrol price is not linked with the crude prices, it is linked with petrol prices and the dollar exchange rate. So we will review the position on fortnightly basis only.