Tuesday, September 19 2006 11:52 Hrs (IST) - World Time -

New Delhi: Government yesterday (Sept17, 2006) ruled out any immediate cut in petrol and diesel prices in line with softening of international crude prices, saying the global decline had reduced losses but not completely wiped them off.

"The decline in international oil prices is welcome but to say that they should result in cut in domestic prices is not correct. The decline has cut the losses oil companies were making but has not made selling fuel profitable. Losses are still there," Petroleum Minister Murli Deora told reporters here.

He said any reduction in fuel prices can be considered only if crude falls to around 50 dollars per barrel mark.

The Indian basket of crude is currently ruling at 59.92 dollars per barrel, down from historic highs of over 70 dollars-a-barrel last month.

While the fall in crude prices has resulted in oil companies breaking even on selling petrol, they were still making over Rs 5 per litre loss on diesel. Besides, selling kerosene and domestic cooking gas (LPG) continued to be a loss making proposition.

Asked if the government will compensate private retailers like Reliance Industries and Essar Oil at par with public sector companies for selling fuel below cost, Deora said,"No government can do that."

The Government had decided to compensate only Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum for selling petrol, diesel, LPG and kerosene below the cost by way of oil bonds and assistance from companies like ONGC.

"There will be no compensation for private companies," he said.

Deora agreed that private retailers too were making huge losses but cited budgetary constraints for not extending government subsidy to them.