Reddy rules out rollback, says India can't run on public sentiment
Loss pegged at staggering Rs 4890 Cr
Source: The Sangai Express / Agencies

New Delhi, May 25 2012: Petroleum Minister S Jaipal Reddy today nipped in the bud any hopes of an immediate rollback in petrol prices saying that oil marketing companies are staring at a staggering loss having suffered a massive Rs 4,890 crore loss in the luxury commodity only in FY 2011-12 .

"In FY 2010-11, oil marketing companies (OMCs) lost Rs 2,200 crore only in petrol.

Oil companies are bleeding," Reddy told a press conference in New Delhi.

On being asked if the government was moving away from the administered price mechanism regime, the minister avoided a straight answer saying, "This is politics and not physics.

We cannot say everything in measures" .

About the mounting political pressure including from his party, the Congress, to reduce prices, he said, "Who wants to advocate unpopular causes even if they are worthy causes? I share the pain.

All political parties including Congress are opposed it.

We cannot run the country on popular sentiments.

Somewhere we need to have an balance" .

Reddy justified that the hike was essential as two historical things happened together.

"First it was the rising crude prices, then the depreciaition of money.

We are forced by global crisis that is beyond our control," the minister said.

When asked on the timing of the hike and if the OMCs were bailing out the government when Parliament was in session, he said, "No time is good for increasing prices" .

Reddy did not give a straight answer to a question that pointed out that crude prices were at a peak a couple of weeks back with $120 per barrel and now it has climbed down to $111 .

"What is desirable is known to everybody.

Politics is to make the desirable feasible," he said.

When asked if the government was in a shock due to the price hike with even Finance Minister Pranab Mukherjee unaware of it, the minister said, "The finance minister is not supposed to know.

OMCs also use their judgment" .

Reddy disagreed that there should be different prices of oil products for the rich and the poor.

"Our experience shows that dual pricing does not work.

It produces negative consequences.

I can take more from LPG and diesel but not from kerosene," the minister said.

Reddy said that he has urged for a meeting of the Empowered Group of Ministers so that the price of diesel, LPG and kerosene can be revisited.

"Since diesel, LPG and kerosene are regulatory commodities, any decision on them has to be taken by the EGoM," he said.

The minister also mentioned about the tussle between the Centre and states asking each other for reduction in taxes.

"The chief ministers are asking the Centre to reduce taxes and vice-versa," he said.

Reacting to a question that pointed to the by-poll in Andhra Pradesh and the timing of the hike, he said, "There is an election going on in our country in all seasons.

These decisions cannot be taken keeping in view the elections in the country" .

However, he gave a glimmer of hope on a rollback, if not immediately.

"We shall look at all options before we come back to you in a few days," Reddy told the reporters.

Petroleum secretary GC Chaturvedi, whom was also present with the minister during the press meet, negated the suggestion of hedging the foreign crude.

"India imports $160 billion of crude oil annually.

It is a very huge amount to be hedged," Chaturvedi said.

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