- Shares of PSU oil retailers tanked up to 8% on Wednesday
- Global crude oil prices recently rose as much as 15%
- Government says it won't interfere in day-to-day functioning of OMCs
"The government cannot change fuel pricing on a knee-jerk basis," Pradhan told reporters here, noting that global crude oil prices had recently gone up as much as 15 per cent owing to production being hit in the US owing to the impact of multiple hurricanes.
"The government will not interfere in the day-to-day functioning of the OMCs... for the last three years, the pricing mechanism has been linked to the market," he said.
The Petroleum Minister said that while hurricanes Irma and Harvey had hit refinery production in Texas, USA, by as much as 13 per cent, he expected global crude prices to ease in the near future.
He said the international prices of petrol and diesel have recently gone up by 18 per cent and 20 per cent, respectively.
The Indian basket of imported crude oils gained nearly $3.50 a barrel during last week even as petrol prices in the country touched their highest levels since Prime Minister Narendra Modi assumed office three years ago, official data showed on Monday.
The Indian basket, comprising 73 per cent sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent, closed trade on the weekend on Friday at $53.63 per barrel. The oil basket had gained over a dollar at the start of last week on Monday to close at $51.34 for a barrel of 159 litres.
Meanwhile, under the daily revision of fuel prices, petrol in Mumbai on Monday cost Rs 79.41 a litre, breaching the level it last touched in August 2014. Petrol per litre on that day cost Rs 70.30 in Delhi, Rs 73.05 in Kolkata and Rs 72.87 in Chennai.
Petroleum products do not come under the Goods and Services Tax (GST) and prices vary at locations according to state taxes.
"GST is the only way to have a rational price mechanism for petroleum products.. the industry has been demanding it and Finance Minister Arun Jaitley (who heads the GST Council) is very interested to have it," Pradhan said, pointing to the substantial difference in prices between Delhi and Mumbai, for instance, on account of local taxes.
Pradhan also said that the decision on reducing the cess on petroleum products rests with the Finance Ministry, adding that this revenue, however, allowed the government to increase social sector spending.
With crude oil prices plunging last year, the government levied cess on petrol in order to mop up extra revenue for the exchequer.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)