New Delhi, June 9 (IANS). HSBC Chief India Economist Pranjul Bhandari said on Tuesday that if crude oil prices remain high in the global market and India’s oil import bill continues to rise, then petrol and diesel prices may increase further.
In an exclusive interview to news agency IANS, Bhandari said that in recent months the actual cost (landed cost) of imported crude oil in India has been around $ 110 per barrel. According to him, at this stage, oil marketing companies (OMCs) are under huge financial pressure.
He said, “In the last one month, the cost of oil import in India has been around $110 per barrel. At these levels, oil distribution companies are suffering huge losses. The government has taken a major part of this burden on itself and has reduced the excise duty on oil.”
Bhandari said that the government alone cannot bear the entire burden of high global oil prices and consumers will also have to bear some part of it.
“Consumers should also bear some part of this burden. Retail fuel prices have already been increased by Rs 7.5 per litre, but I think it can be increased a little more,” he said.
He further said that in his opinion, an increase in petrol and diesel prices by Rs 10 to Rs 12 per liter would have been appropriate, as this would have spread the burden of the global oil price shock in a more balanced manner between the government and consumers.
Pranjul Bhandari indicated that if crude oil prices remain high in the international market, further increase in the prices of petrol and diesel cannot be ruled out in the coming times.
“If this crisis continues and India’s imported oil bill remains high, then some further increase in fuel prices is possible from here,” he said.
His comments come at a time when there is continued volatility in the global crude oil market and this is putting pressure on the cost of energy imports.
Earlier this week, the government had also said that the country’s oil marketing companies are still facing huge financial pressure. Companies are incurring under-recovery losses of around Rs 600 to 700 crore per day, which also includes losses on LPG sales.
During a press briefing held in the national capital, Additional Secretary, Ministry of Petroleum and Natural Gas, Praveen Khannuja said that this loss is mainly due to the increasing gap between retail selling prices and international fuel prices.
According to him, financial pressure on oil companies is continuously increasing due to high fuel prices in the global market and domestically controlled retail prices.
–IANS
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