November 17th, 2011
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Petrol prices to be revised fortnightly

petrol price New Delhi: State-run oil firms will revise petrol prices every two weeks if domestic prices need to be aligned with international levels, as they prepare to replace the opaque pricing mechanism with a transparent and predictable system, top executives said. Oil companies also clarified that petrol prices in India are indexed to Singapore gasoline rates.  Government and company officials had earlier justified fuel price hikes by linking domestic pump prices to international crude oil rates.

“We review petrol prices every fortnight. We will ensure petrol prices will fall if international prices fall. If international prices rise, our prices will also rise,” said RK Singh, chairman of Bharat Petroleum  Corp Ltd.

A government official, however, said the oil ministry’s intervention cannot be ruled out. “Oil is a sensitive commodity. The government has to keep a constant vigil. When petrol was decontrolled, it was decided that the government can step in any time if public interest is at stake,” said the official on condition of anonymity.

Oil companies have faced flak for 13 consecutive petrol price hikes in the past year-and-a-half even though international rates have dipped at times. They now hope to demonstrate that petrol prices can move in both directions, and industry officials say the new system should help depoliticize the issue.

An industry official said oil companies were encouraged by the prime minister, who brushed aside political opposition to the November 4 petrol price hike and said he supported market pricing.

Petrol was decontrolled in June 2010, but in effect oil companies informally consult the oil ministry before revising prices. Ahead of assembly elections in key states, oil companies did not raise petrol prices despite higher international rates.


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