NEW DELHI: Petrol may become costlier by 50 to 70 paise next week as state-owned oil companies get ready to exercise their pricing freedom for the first time after the government decontrolled petrol prices on June 26.
Petrol prices went up by Rs 3.50 a litre with the decontrol, but for further increases oil companies were to devise a transparent and market-linked pricing system. “Petrol price may go up by 50 paise if oil PSUs take a 15-day average of international prices and up to 70 paise if a one month average is taken,” an oil ministry official said. “The new rates will be announced only after August 31 after the Parliament session ends,” he said, requesting anonymity. The three public sector oil marketing companies (OMCs)—Indian Oil, Bharat Petroleum, and Hindustan Petroleum—will meet to work out a mechanism to peg pump prices of petrol to international prices, chairman of a state-owned fuel retailing firm said. Ideally, petrol price revision should be done every fortnight to capture global oil price fluctuations, he said. “But, a final call will be taken after the meeting”. The pricing mechanism of the three PSUs, which control over 90% of the fuel retail market, will also impact private oil companies—Reliance Industries (RIL), Shell India and Essar Oil. “The PSU cartel will dictate the market price; we will be forced to follow their rates,” a executive working for a private oil company said. “Cartelisation will restrict competition,” he said, requesting anonymity. Private retailers are also unhappy with the government’s reluctance to free diesel prices. Petrol pricing freedom alone makes no sense as real business volume comes from diesel sale, pricing for that is still restricted, he said. Diesel constitutes 40.8% of the total sales of petroleum products in the country. Since 2002 private oil companies are free to charge market rates for petrol and diesel but are unable to compete with their public sector counterparts who sell fuel often below cost under government dictate. On June 26 the government had announced freeing both petrol and diesel pricing from its control but allowed state-owned oil companies to fix petrol prices only. The government continues to control diesel prices sold through pumps of public sector oil companies. As a result, state-owned oil companies are losing about Rs 2.50 on every litre of diesel sold from their pumps. http://economictimes.indiatimes.com/markets/commodities/Petrol-prices-set-to-rise-by-up-to-70p-per-litre/articleshow/6448803.cms -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
