Statement of Petroleum Minister in Rajya Sabha on price rise of the petroleum products
Rajya Sabha
Following is the uncorrected text of statement made Shri Mani
Shankar Aiyar, Minister of Petroleum & Natural Gas and Panchayati Raj in
the Rajya Sabha today on calling attention to the matter of exorbitant rise
in prices of on petroleum products :-
"Given India’s oil import dependence, which is around 71% at present, volatility in international oil prices inevitable, impacts on domestic consumer prices of petroleum products. International oil prices have been unusually high during the current year. For instance, as compared to the average Indian basket of crude oil priced at US$ 27.96/bbl during 2003-04, the average price during April – December 2004 (upto 6th December 2004) has been US $ 37.60/bbl. The following table gives the international price trends of crude oil, kerosene, LPG, petrol and diesel from March 2002 onwards, the time of the announcement of APM (Administered Pricing Mechanism) dismantling :
(Figures in $bbl except where indicated)
|
Period |
Crude-Indian Basket |
Kerosene |
LPG $/MT |
Petrol |
Diesel |
|
March 2002 |
23.31 |
23.65 |
194.00 |
26.43 |
23.27 |
|
2002-03 |
26.66 |
29.33 |
280.40 |
30.15 |
28.93 |
|
2003-04 |
27.96 |
31.19 |
278.45 |
35.03 |
30.48 |
|
April 04 |
32.37 |
38.98 |
292.40 |
42.79 |
36.89 |
|
August 04 |
40.53 |
50.03 |
341.00 |
50.62 |
47.98 |
|
Sept. 04 |
39.15 |
53.04 |
383.00 |
48.20 |
50.44 |
|
Oct. 04 |
43.38 |
58.29 |
401.00 |
53.68 |
53.79 |
|
Nov 04 |
38.82 |
53.56 |
469.00 |
51.74 |
50.90 |
Relative to the sharp and persistent increase in the international prices, the modest increase in the domestic prices of these petroleum products during calendar year 2004 is given below :
|
Revision in the retail selling prices of Petrol, Diesel, Domestic LPG and PDS Kerosene at Delhi. |
|
As on : |
Petrol (Rs./litre) |
Diesel
(Rs./litre) |
Domestic LPG
(Rs./Cylinder) |
PDS Kerosene
(Rs./litre) |
|
01.01.04 |
33.70 |
21.73 |
241.60 |
9.01 |
|
01.03.04 |
33.71 |
21.74 |
-- |
-- |
|
16.06.04 |
35.71 |
22.74 |
261.60 |
-- |
|
1.08.04 |
36.81 |
24.16 |
-- |
-- |
|
5.11.04 |
39.00 |
26.28 |
281.60 |
-- |
|
16.11.04 |
37.84 |
-- |
-- |
-- |
|
Current Price (7-12-2004) |
37.84 |
26.28 |
281.60 |
9.01 |
The government/Oil PSUs have taken following measures to contain the impact of international prices on the domestic consumer prices of petrol, diesel, PDS kerosene and domestic LPG :
- The Government reduced excise duties on petrol, diesel and domestic LPG by 4%, 3% and 8% respectively effective 16.6.2004. Later, effective 19.8.2004, the excise duties on petrol, diesel and PDS Kerosene were reduced by 3%, 3% and 4% respectively. Also, effective 19.8.2004, customs duties on petrol, diesel, PDS Kerosene and Domestic LPG were reduced 5% each.
- PDS kerosene and domestic LPG are subsidized products. In addition to the Government subsidy, oil PSUs have been sharing the burden by not passing the full increase in the international prices in the domestic consumer prices of these products. Despite the steep increase in international prices, the selling price of PDS kerosene has not increased even after an announcement by the previous government of the dismantling of Administered Price Mechanism i.e., effective 1-4-2002. The Retail Selling Price (RSP) of domestic LPG has been increased twice by only Rs.20/cylinder each time, effective 16.6.2004 and 5.11.2004 respectively. During the first half of 2004-05, the oil PSUs have had estimated under-recoveries of around Rs.7,800 crore on these products. It may be mentioned that at the current level of duties, taxes and Government subsidy, the RSP of PDS Kerosene and Domestic LPG at Delhi would need to increase by the following amount based on November 2004 international prices:
|
Product |
Current RSP |
Increase Required |
Import Parity Price |
|
PDS Kerosene (Rs./litre) |
9.01 |
11.05 |
20.06 |
|
Domestic LPG (Rs./Cylinder) |
281.60 |
210.40 |
492.00 |
- The oil PSUs have also estimated under-recoveries of around Rs.3,300 crore during April-November 2004 for non-revision in the prices of petrol and diesel in line with the international prices.
The Government have thus taken appropriate measures to protect consumers from the increase in the international prices to the extent possible. Considering the high international prices and huge under-recoveries of oil PSUs, increase was given effect in the prices of petrol (to the full extent of the rise in import parity price), diesel (to the extent of half the difference between the domestic RSP and the ruling import parity price) and domestic LPG effective 5-11-2004. The RSP of Motor Spirit (Petrol) declined effective 16-11-2004 on account of the decline in import parity prices, but has been held onto 16-11-2004 level since."
(Release ID :5484)