Cheaper crude not to benefit the Indian consumer
04 Oct 2006
Mumbai: Lower crude prices will not be passed on to consumers but instead it will be used to reduce the government's total subsidy cost, finance minister P Chidambaram said.
"When
the international oil prices increased, we did not pass
the entire burden on to the consumers and the reduced
international oil prices have only lessened the subsidy
burden of firms such as ONGC, oil marketing companies
and the government," Chidambaram said.
A reduction in subsidy outgo would mean that funds would be available for re-investment by these companies, he said. However, he said the reduced international prices would not affect the size of oil bonds to be issued by the government. The government had proposed to issue oil bonds worth Rs14,150 crore to the oil companies in September. He however, declined to give the exact timing of the issue.
Crude
prices currently rules at around $58 a barrel in Western
markets. The price of crude has shed more than seven
per cent since the start of the week.