Oil prices in India are reaching for the sky even as international oil prices hit an all-time low
as international oil price nose-dives with every passing day -- from us $22 in October 1997 to us $12 in June 1998 -- triggering worldwide debate on its impacts, particularly on the environment, the Indian government doesn't seem to be bothered about it. In the last budget, petrol prices were hiked by a rupee.
Whether it is the ministry of oil and natural gas or the oil coordination committee, the international development has not affected them. "International oil price never affects the Indian market," said a spokesperson of the ministry. Similarly, the directorate of hydrocarbons under the same ministry is ignorant about this issue.
In the wake of the decrease in oil prices, it is feared that the consumption of fossil fuel will increase and would lead to more pollution.
Also, the decrease in oil price might lower the government's support to the non-conventional energy sector. A spokesperson of the ministry of non-conventional energy said: "Rather, allocation for our sector has gone up in this budget from Rs 190 crore to Rs 404 crore".
The international market has been crashing since May. The crash is attributed to a sudden fall in demand in Asia without a fall in the supply. The International Energy Agency, which monitors the world oil price on behalf of the industrialised countries, has estimated a further drop in the demand for oil in Asia. Now there are frantic cuts in supply from oil producing countries to stabilise the oil price and not to let it go below us $10.
The Indian market remains unaffected as the Indian oil sector is based on the administered price mechanism ( apm ) under which, as a policy matter, the government regulates the price irrespective of the international price. Till now the petroleum price is regulated. However, according to the blueprint prepared by the ministry of petroleum and natural gas, the entire domestic petroleum sector would be deregulated by year 2001-02.
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