India: Fall in global Crude Oil Not to Bring Down Fuel Prices

 A drop in global crude prices does not offer the government any immediate scope for reduction in domestic fuel prices, although India's crude basket price has fallen over eight per cent in two months.  "It (fall in crude prices) is a happy sign. It is a welcome development. But there is no scope for reduction in domestic retail prices," Petroleum Minister Murli Deora told reporters here.

Crude oil prices have fallen to below us $113 a barrel this week from all-time high of us$147 per barrel last month.
The basket of crude oil India buys averaged us$109.88 per barrel, down from us$119 a barrel price on June 4 when petrol, diesel and domestic cooking gas prices were raised.

However, petrol retailers that includes Indian Oil, Bharat Petroleum and Hindustan Petroleum continue to lose money on fuel sales, Deora said. "There still are huge under-recoveries (on fuel sales). I don't see how we can reduce retail prices when our companies continue to lose money."

Fuel prices in India are pegged at us$68 per barrel, much lower than the current prices in international market. "Our retail prices are pegged much lower (current international crude prices). There is no scope for reduction in petrol and diesel prices as of now," he said.

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