Question : OIL PRICES IN WORLD MARKET

the current trend in oil prices in world market and its likely impact on the oil prices in the country ?

Answer given by the minister


MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SHRI DINSHA PATEL)

Since the end of 2003, there has been an unprecedented, sharp and spiraling increase in international oil prices combined with considerable week-to-week and even day-to-day volatility. The current trend in international prices is at Annex. Government, therefore, froze the prices of PDS kerosene and began modulating the prices of petrol and diesel also, in addition to that of domestic LPG. Consequently, the full impact of the international price increase has not been passed on to consumers of these sensitive products. The price revisions effected by the Government were on account of the steep increase in international prices coupled with periodical changes in tax structure based on the Government policy. The Government pricing policy has attempted to strike the right balance between the interests of the stake-holders, namely, the consumers, Oil Marketing Companies and the Government.

ANNEX

Trend in the international oil prices

Crude oil	Petrol	Diesel	Kerosene	LPG	(Indian	$/bbl	$/bbl	$/bbl	$/bbl	Basket)	$/bbl
March 2002 23.31 26.43 23.27 23.65 194.00 2002-03 26.66 30.15 28.93 29.33 280.40 2003-04 27.96 35.03 30.48 31.19 278.45 2004-05 39.22 49.01 46.91 49.50 368.52 Feb`05 42.58 53.70 50.09 52.24 369.20 Mar`05 49.27 58.72 59.83 63.74 380.00 Apr`05 49.43 60.23 61.36 69.00 416.80 May`05 47.02 53.37 56.45 61.09 421.80 June`05 52.72 58.38 65.61 66.98 394.80 July`05 55.01 63.43 66.89 67.75 399.80 Aug`05 60.03 72.52 68.09 73.42 403.60 Sept`05 59.74 78.93 71.78 75.70 438.2 Oct`05 56.28 67.91 67.97 71.33 517.0 Nov`05 53.31 59.48 57.69 60.91 547.0 Dec`05 55.05 59.90 60.23 66.99 536.00 Jan`06 60.61 65.42 64.95 72.85 581.00 Feb`06 59.01 63.88 62.87 72.40 625.00 (upto 23rd) Average 55.29 63.90 63.99 68.95 480.09 (Apr`05 to 23rd Feb`06)
Increase in 137.2% 141.8% 174.9% 191.5% 147.5% international prices in April`05 to 23rd Feb`06
Increase in - 63.8% 83.54% 0.78% 22.58% current retail price over Mar`02 (Delhi retail prices considered)

The current composition of Indian Basket of Crude represents Average of Oman & Dubai for sour grades and Brent (Dated) for sweet grade in the ratio of 58:42.