Government won’t intervene in daily price revision: Oil minister

Dharmendra Pradhan clarified the government will not step in to check rising petrol and diesel prices, which hit three-year highs this week.

Published: 14th September 2017 08:06 AM  |   Last Updated: 14th September 2017 08:06 AM   |  A+A-

Union Minister Dharmendra Pradhan (File | Reuters)

By Express News Service

NEW DELHI: State-owned oil marketing companies’ (OMCs) shares took a beating on Wednesday after reports appeared speculating the government could direct OMCs to absorb the effects of the current global crude price rise. The three biggest OMC saw shares fall up to 6.23 per cent by the end of the trading day — BPCL (6.23 per cent), HPCL (5.06 per cent), and IOCL (4.28 per cent).

However, later in the day, oil minister Dharmendra Pradhan clarified the government will not step in to check rising petrol and diesel prices, which hit three-year highs this week — the price of petrol in Mumbai stood at Rs 79.48 per litre and the price of diesel in Kolkata and Chennai stood at Rs 61.37 and Rs 61.84 per litre, respectively.

The fall in oil PSU shares also contributed to the Nifty index halting a four-day positive run. The fall prompted Pradhan to stress that the government will continue with its dynamic pricing policy.
He also said that bringing fuels within the ambit of GST would ensure uniformity in prices. Currently, value added tax and excise duty are imposed on oil, which vary from one state to another.

The excise duty component had earlier been increased by the government when oil prices started falling over three years ago, with the result that a large part of the benefit of the fall in prices was not passed on to the consumer.

However, the recovery of global crude prices over the past few quarters has not prompted the government to reduce the excise component, resulting in Indian petrol and diesel prices reaching levels last seen three years ago while global crude prices still rule lower.

Shares slide

The three OMCs saw their stock prices fall by up to 6.23 per cent by the end of the trading day on Wednesday — BPCL (6.23%), HPCL (5.06%), and IOCL (4.28%)

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