Can't keep changing fuel prices on knee-jerk basis: Pradhan

Said shifting to GST regime will be the only way to have a transparent tax structure on fuel items

Share prices of the three government-owned oil marketing companies (OMCs) fell on Wednesday on pricing worries, which the government later said were baseless.

Reports suggested the three -- Bharat Petroleum Corporation (BPC), Hindustan Petroleum Corporation (HPC) and Indian Oil Corporation (IOC) -- might be asked to absorb the recent global hike in crude oil prices. As a result, their share prices fell 6.2%, 5.1% and 4.3%, respectively, on the BSE exchange.

The markets were worried on whether the government was going back to the regulated pricing era. However, after trading hours, petroleum minister Dharmendra Pradhan said the government would not ask state-run companies to absorb the price rise in petrol and diesel and would stay to market-driven pricing.

He added that a shift to the goods and services tax (GST) regime was the only way to have a transparent tax structure on fuel items.

"The government has no business to interfere in the day-to-day affairs of companies. We have linked product prices to the market and will stick to that," said Pradhan. The minister added that global prices would ease very soon.

"A knee-jerk reaction is not required when we are following a formula. We expect prices to come down soon. This increase is mainly because of the cyclones that hit the US, which resulted in a decline of refining capacity by 13% and an increase in diesel prices by 20% and petrol by 18% in the past three months," he added....READ MORE