The government will cut petrol and diesel prices when there is a sustained drop in global crude oil prices, Petroleum Minister Murli Deora said on Tuesday.
"Government is keeping a close watch on international prices. The government will consider downward revision in the prices of petrol and diesel when there is a sustained drop in the prices of crude in the international market," he said in a written reply to a question in Rajya Sabha.
The Indian basket of crude oils was at about $67 per barrel when petrol and diesel prices were last raised in June. International crude oil prices went up to $75 per barrel in August but domestic retail prices were not raised despite the fact that the June hike had not completely covered surge in international prices, he said.
The oil marketing companies are still incurring losses on diesel, PDS kerosene and domestic LPG.
In case of PDS kerosene, the last price revision was done almost 5 years ago when the international oil prices were very low.
Similarly, domestic LPG prices were revised marginally two years ago. In the first half of 2006-07, the under-realisation of sale of petrol, diesel, LPG and kerosene was Rs 33,200 crore (Rs 332 billion).
Last week, Deora had said the government in July turned down a demand from oil companies for another upward revision in prices of petroleum products when the Indian crude basket touched $70.69 per barrel.
At current prices of $57 to $58 per barrel, oil companies are still incurring under recovery on diesel, PDS kerosene and domestic LPG, he said.
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