The Petroleum Ministry has prepared a draft Cabinet note on freeing petrol and diesel prices from government control, after which they will be linked to international movements.
“The draft note is ready. It will be presented to the new petroleum minister and if approved, it will go to the Cabinet for consideration,” a top Petroleum Ministry official said.
With the international crude oil prices hovering between $ 50 a barrel and $ 60 a barrel, the ministry feels it is the right time to free petrol and diesel prices from government control.
According to the proposal, state-run Indian Oil, Bharat Petroleum and Hindustan Petroleum will be given freedom to fix the rates of petrol and diesel till the time crude oil price stays below $ 75 a barrel.
If it breached the mark, the government would step in to protect the interests of consumers, he said.
“At current crude rates, oil companies incur a loss on petrol sales but make marginal profit on diesel. So, if pricing is freed, petrol prices will go up by Rs 1.99 a litre while diesel rates will come down by Rs 0.32 a litre,” he said.
