Fuel Price Cut by Oil Firms was One-Time Move: Finance Ministry

New Delhi: The petrol and diesel price cuts made earlier this month by state-run oil marketing companies was a “one-time measure”, and the government has no intention of reversing the deregulation of the oil market, a Finance Ministry official said here on Thursday. The official, who did not wish to be identified, said that while the country’s economic fundamentals remained strong, the current volatility in the capital markets and a persistent fall in the rupee value are being caused by external factors. “It was a one-time measure of letting OMCs take the 1-rupee hit on oil prices. We have no intention of either rolling back deregulation of oil prices or asking oil companies to take such a hit,” he said.

Last week, the Centre cut petrol and diesel prices by Rs 2.50 per litre, a decision that was followed by several BJP-ruled states, giving an overall relief of Rs 5 per litre to the consumer. The central government reduced the excise duty on petrol and diesel by Rs 1.5 per litre each and asked the OMCs to absorb an additional Re 1 per litre reduction. Finance Minister Arun Jaitley said the Centre’s decision will result in a revenue loss of Rs 10,500 crore in six months.

Queried on whether state-run upstream explorer companies like the Oil and Natural Gas Corp (ONGC) could be asked to share the increased subsidies on kerosene and cooking gas, the finance ministry official said: “We do not have any intention of asking upstream companies to share the subsidy burden.” “The Indian stock and rupee markets are being impacted by external factors. Expect global crude oil prices to remain range-bound, below $85 a barrel,” the official said. “Fundamentals of our economy remain strong. The Indian economy stands to gain following the US-China trade war.” (IANS)