New Delhi, Nov. 3 (NNN): As the fuel prices in the international market continued to fall, the union government on Wednesday deferred a decision on hiking prices of petrol, diesel, LPG and kerosene. It will now review the situation later and decided on the issue within the next 24-48 hours, this was announced by Finance Minister P Chidambaram after a meeting of the Cabinet Committee on Economic Affairs (CCEA).
A CCEA meeting will be called in the next 24-48 hours to decide on the matter.
The prices of petrol and diesel were last revised on August 1.
The non-revision in the prices have cost the oil companies about Rs 10,000 crore in revenues in the first half of the current fiscal year.
The 33 per cent rise in the cost of crude oil since August 1 require petrol prices to be raised by Rs 1.22 a litre and diesel by Rs 2.24 per litre.
Petrol is currently being sold at Rs 2.20 per litre below the imported cost while diesel is priced Rs 4.15 a litre less than imported cost.
LPG is underpriced by Rs 158 per cylinder and Kerosene, whose prices have not changed in the past 30 months, is being sold at Rs 11 per litre less than import cost.
Fall In Prices Continues: Meanwhile, crude oil futures have settled below $50 a barrel, falling to their lowest closing level since the end of September, as fears about heating oil subsided even though inventories remain tight.
The decline in oil prices over the past week continued in spite of persistent uncertainty about international oil output, with a strike looming in Nigeria and saboteurs attacking pipelines in Iraq.
Market jitters have subsided slightly due to an improving picture in the Gulf of Mexico, where fallout from Hurricane Ivan has knocked out nearly 27 million barrels of crude production since mid-September. Globally, the oil supply chain is operating with a thin margin for error and that is the underlying reason that prices are more than 70 per cent higher than a year ago, analysts say.
Light crude for December delivery settled down 51 cents at $49.62 on the New York Mercantile Exchange on Tuesday.
Brent crude for December delivery was down 21 cents at $46.85 on the International Petroleum Exchange in London.
Alaron Trading Corp analyst Phil Flynn said the sharp drop in prices from a week ago was due to expectations that the nation's heating oil supply would soon begin to build to more comfortable levels.
"We were a little ahead of ourselves at $55 and we've corrected a little bit," said Flynn. A record Nymex closing price of $55.17 per barrel was reached October 22 and matched four days later.