NEW DELHI: With oil PSUs deciding to not hike petrol and diesel costs ahead of Karnataka elections, IOC Chairman Sanjiv Singh today stated the corporate has made up our minds to "temporarily moderate" costs to avoid sharp spikes and panic amongst customers.
State-owned oil corporations have since April 24 no longer changed petrol and diesel costs despite benchmark world product rates going up by way of nearly $3 in keeping with barrel.
Separately, Oil Minister Dharmendra Pradhan stated the federal government has not anything to do with fuel pricing after it deregulated and gave PSUs freedom to fix retail rates.
Singh on the other hand indicated that retail costs will rise if the present pattern in world oil costs continues. Karnataka goes to polls on May 12.
"We have decided to temporarily moderate retail prices by not passing on the required increase as we believe the current international oil product prices are not supported by fundamentals. So we have decided to wait for a while," Singh informed newshounds on sidelines of an trade tournament here.
The freeze in fuel costs follows the finance ministry's refusal to cut excise duty to give relief to the typical man after petrol hit a 55-month prime of Rs 74.63 a litre and diesel touched a document prime of Rs 65.93.
"We can pass on daily spikes based on the freedom we have to revise prices on a daily basis. But we believe the surge in international oil products market is not supported by fundamentals and passing them on to consumers will unnecessarily create panic," Singh stated. "So we moderate to a certain extent so that peaks are avoided."
Asked about all the 3 PSU oil corporations fixing retail rates in tandem, he stated it was once imaginable that all of them idea that the spike in world oil costs isn't supported by way of fundamentals and needs to be moderated.
Petrol and diesel costs have no longer changed since April 24. This is despite the benchmark world rate for petrol going up from $78.84 in keeping with barrel, which was once used for raising the price to Rs 74.63 a litre on April 24, to $81.61 now, in keeping with sources aware about fuel pricing method.
The benchmark world diesel rates all through this period have climbed from $84.68 in keeping with barrel to $87.14. Also, the rupee has weakened to Rs 66.62 to a US greenback from Rs 65.41, making imports dearer.
Shubhada Rao, Chief Economist, Yes Bank, stated hardening of world crude oil worth is prone to manifest itself by way of upper drive on India's twin deficits along with inflation while also having a marginally damaging spillover on overall expansion momentum.
"A 10 per cent increase in oil price could potentially increase headline CPI inflation by 0.2-0.3 per cent, increase CAD/GDP ratio by 0.3 per cent, and lower overall GDP growth by 0.1 per cent. The final impact on fiscal would depend upon the degree of discretionary fiscal adjustment encompassing both non oil revenue and non oil expenditure," Rao stated.
Pradhan had remaining month denied studies of a directive to state oil corporations to soak up at least Re 1 a litre hike by way of no longer raising costs in step with cost.
The costs at petrol pumps of state-owned fuel outlets like Indian Oil Corp (IOC) had been lower by way of 1-3 paisa every day in the first fortnight of December 2017 sooner than Gujarat went to polls.
They began shifting up in an instant after polling for assembly elections in Gujarat concluded on December 14, resulting in hypothesis that govt can have asked oil firms to hold directly to the prices.
State-owned oil firms in June remaining yr dumped the 15-year previous apply of revising rates on 1st and 16th of every month and as an alternative followed a dynamic day by day worth revision to immediately reflect adjustments in cost.
If this custom was once followed in letter and spirit petrol and diesel costs will have to were higher by way of 60-80 paisa a litre in remaining fortnight, an analyst monitoring the sphere stated.
The govt had in June 2010 freed petrol worth from its keep an eye on and the diesel rates had been deregulated in October 2014. Prices have since then moved roughly in tandem with world rates barring a couple of exceptions just like the period sooner than a the most important election.
Finance Secretary Hasmukh Adhia and Economic Affairs Secretary Subhash Garg have up to now weeks dominated out any speedy aid in excise duty to cushion the will increase warranted from a spike in world oil worth.
The BJP-led govt had raised excise duty 9 instances between November 2014 and January 2016 to shore up funds as world oil costs fell, however then lower the tax simply as soon as in October remaining yr by way of Rs 2 a litre.
The govt had between November 2014 and January 2016 raised excise duty on petrol by way of Rs 11.77 a litre and that on diesel by way of Rs 13.47 in keeping with litre to take away positive aspects arising from plummeting world oil costs. This resulted in its excise mop up more than doubling to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.
The central govt had lower excise duty by way of Rs 2 in keeping with litre in October 2017, when petrol worth reached Rs 70.88 in keeping with litre in Delhi and diesel Rs 59.14. Because of the aid in excise duty, diesel costs had on October four, 2017, come right down to Rs 56.89 in keeping with litre and petrol to Rs 68.38 in keeping with litre.
However, a global rally in crude costs pushed domestic fuel costs a ways upper than those ranges.
State-owned oil corporations have since April 24 no longer changed petrol and diesel costs despite benchmark world product rates going up by way of nearly $3 in keeping with barrel.
Separately, Oil Minister Dharmendra Pradhan stated the federal government has not anything to do with fuel pricing after it deregulated and gave PSUs freedom to fix retail rates.
Singh on the other hand indicated that retail costs will rise if the present pattern in world oil costs continues. Karnataka goes to polls on May 12.
"We have decided to temporarily moderate retail prices by not passing on the required increase as we believe the current international oil product prices are not supported by fundamentals. So we have decided to wait for a while," Singh informed newshounds on sidelines of an trade tournament here.
The freeze in fuel costs follows the finance ministry's refusal to cut excise duty to give relief to the typical man after petrol hit a 55-month prime of Rs 74.63 a litre and diesel touched a document prime of Rs 65.93.
"We can pass on daily spikes based on the freedom we have to revise prices on a daily basis. But we believe the surge in international oil products market is not supported by fundamentals and passing them on to consumers will unnecessarily create panic," Singh stated. "So we moderate to a certain extent so that peaks are avoided."
Asked about all the 3 PSU oil corporations fixing retail rates in tandem, he stated it was once imaginable that all of them idea that the spike in world oil costs isn't supported by way of fundamentals and needs to be moderated.
Petrol and diesel costs have no longer changed since April 24. This is despite the benchmark world rate for petrol going up from $78.84 in keeping with barrel, which was once used for raising the price to Rs 74.63 a litre on April 24, to $81.61 now, in keeping with sources aware about fuel pricing method.
The benchmark world diesel rates all through this period have climbed from $84.68 in keeping with barrel to $87.14. Also, the rupee has weakened to Rs 66.62 to a US greenback from Rs 65.41, making imports dearer.
Shubhada Rao, Chief Economist, Yes Bank, stated hardening of world crude oil worth is prone to manifest itself by way of upper drive on India's twin deficits along with inflation while also having a marginally damaging spillover on overall expansion momentum.
"A 10 per cent increase in oil price could potentially increase headline CPI inflation by 0.2-0.3 per cent, increase CAD/GDP ratio by 0.3 per cent, and lower overall GDP growth by 0.1 per cent. The final impact on fiscal would depend upon the degree of discretionary fiscal adjustment encompassing both non oil revenue and non oil expenditure," Rao stated.
Pradhan had remaining month denied studies of a directive to state oil corporations to soak up at least Re 1 a litre hike by way of no longer raising costs in step with cost.
The costs at petrol pumps of state-owned fuel outlets like Indian Oil Corp (IOC) had been lower by way of 1-3 paisa every day in the first fortnight of December 2017 sooner than Gujarat went to polls.
They began shifting up in an instant after polling for assembly elections in Gujarat concluded on December 14, resulting in hypothesis that govt can have asked oil firms to hold directly to the prices.
State-owned oil firms in June remaining yr dumped the 15-year previous apply of revising rates on 1st and 16th of every month and as an alternative followed a dynamic day by day worth revision to immediately reflect adjustments in cost.
If this custom was once followed in letter and spirit petrol and diesel costs will have to were higher by way of 60-80 paisa a litre in remaining fortnight, an analyst monitoring the sphere stated.
The govt had in June 2010 freed petrol worth from its keep an eye on and the diesel rates had been deregulated in October 2014. Prices have since then moved roughly in tandem with world rates barring a couple of exceptions just like the period sooner than a the most important election.
Finance Secretary Hasmukh Adhia and Economic Affairs Secretary Subhash Garg have up to now weeks dominated out any speedy aid in excise duty to cushion the will increase warranted from a spike in world oil worth.
The BJP-led govt had raised excise duty 9 instances between November 2014 and January 2016 to shore up funds as world oil costs fell, however then lower the tax simply as soon as in October remaining yr by way of Rs 2 a litre.
The govt had between November 2014 and January 2016 raised excise duty on petrol by way of Rs 11.77 a litre and that on diesel by way of Rs 13.47 in keeping with litre to take away positive aspects arising from plummeting world oil costs. This resulted in its excise mop up more than doubling to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.
The central govt had lower excise duty by way of Rs 2 in keeping with litre in October 2017, when petrol worth reached Rs 70.88 in keeping with litre in Delhi and diesel Rs 59.14. Because of the aid in excise duty, diesel costs had on October four, 2017, come right down to Rs 56.89 in keeping with litre and petrol to Rs 68.38 in keeping with litre.
However, a global rally in crude costs pushed domestic fuel costs a ways upper than those ranges.
IOC says oil PSUs froze fuel prices to avoid consumer pain
![IOC says oil PSUs froze fuel prices to avoid consumer pain]()
Reviewed by Kailash
on
May 09, 2018
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