As per the practice of revising rates every fortnight, state fuel retailers were expected to announce a cut in petrol and diesel prices on Thursday as global rates had fallen by about 4 percent. However, they skipped the revision.

On the previous two occasions when they skipped revising rates, the government had raised excise duty to mop up additional revenue, thereby not passing on the benefit of fall in global oil rates to consumers.

"It (petrol and diesel price cut) is not in our hands," Pradhan said referring to the two fuels as being deregulated commodities whose pricing is decided by oil companies.

"What oil companies feel appropriate they will do," he said at 13th Petro India Conference, organised by India Energy Forum and ORF, here.

The fall in international oil prices should have warranted Rs 3-4 per litre reduction but some of the gains were taken away by depreciation in the rupee against the US dollar.

B Ashok, Chairman of Indian Oil Corp, the nation's largest fuel retailer, said, "We are always keeping track of these things (fall in crude oil prices). We will have to do it (price revision) at the appropriate time."

While the fall in global oil rates is a boon for consumers, for oil companies it has meant over Rs 12,000 crore of inventory losses.

The crude oil that is being processed currently in refineries is one that was bought about 6-8 weeks back when rates were higher than present prices. By the time it is processed and marketed its market value would have come down, resulting in inventory losses.
 
"There is huge drop in crude prices which is having a tremendous impact on our inventories, its a cash loss. We are paying much higher price for the crude and today we are processing the crude at a much lower price and passing it. We are taking our decision based on that and we think we  have been doing the right thing," Ashok said.

The government early this month raised excise duty on petrol and diesel by Rs 2 per litre each to gain from slumping global oil rates.

This was the third excise duty hike since November 2014 and cumulatively the government stood to gain about Rs 16,000 crore in revenue this fiscal.

Previously, it had raised excise duty by Rs 1.50 a litre on both products from November 12 and by Rs 2.25 per litre on petrol and Re 1 on diesel from December 2.

Global crude oil prices have fallen almost 50 percent since June 2014, the most since the 2008 financial crisis, as supplies swelled. Oil prices are trading around USD 46 per barrel.

In April-September, IOC, Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) had an inventory loss of Rs 5,300 crore which has risen by "two to three times" since then, an official said.

Petrol and diesel prices were last cut on December 16 by Rs 2 per litre each. This was the eighth straight reduction in petrol prices since August, and fourth in diesel since October.

Petrol in Delhi today costs Rs 61.33 a litre, the lowest in 44 months. Diesel costs Rs 50.51 a litre, the lowest since July 2013.

Since August, petrol price have been cut by Rs 12.27 per litre on a cumulative basis while diesel rates in four downward revisions have been slashed by a total of Rs 8.46 a litre.

Crude oil price in June was at USD 115 per barrel.

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