RIL may not reopen petrol pumps
08 Dec 2008
Mumbai: Reliance Industries, has postponed plans to reopen its retail fuel outlets after the Union government last week decided to reduce petrol prices by Rs5 per litre and diesel by Rs2 per litre. RIL had shut its petrol pumps in March this year.
According to sources in the company the government's move to cut fuel prices has made the reopening of RIL's 1,432 pumps across the country ''not feasible any more.''
In November R S Pandey, secretary in the petroleum ministry, had told the press that ''Reliance was keen on reopening their outlets''.
RIL and Essar Oil stopped retailing oil from their petrol pumps because they couldn't compete with the below-cost prices at which state-owned retailers sold petrol and diesel. Private oil companies say they stand at a disadvantage because state-owned companies are compensated through oil bonds they can't avail of.
Last week the government passed on the benefit of a steep fall in international crude prices to the consumers, by cutting the retail selling price of petrol by Rs5 a litre and diesel by Rs 2 a litre.
The prices of cooking fuels were, however, left untouched. The cut in petrol prices is with effect from 6 December.
While announcing the price cuts on fuels petroleum minister Murli Deora said the government was closely watching international oil prices and their impact on the country's economy, and will take appropriate decisions whenever necessary.
The government has been under pressure to cut fuel prices. Since August, crude oil prices had started declining. On 4 December, the Indian basket stood at $41.53 a barrel, after hitting a high of $142.04 a barrel in July.
In June when crude oil scaled $120 a barrel, the government increased prices of petrol by Rs5 a litre, diesel by Rs3 a litre and LPG by Rs50 a cylinder. Even then the government had taken the average crude price of around $67 a barrel. The increase had resulted in petrol costing Rs50.56 a litre in Delhi from Rs45.56 a litre. In effect, the current cut has neutralised the June petrol hike.