No immediate rollback of petrol price: Govt

New Delhi: Ruling out any immediate rollback in the steep Rs 7.54 a litre hike in petrol prices, the Indian government said on Friday that it will watch international oil prices and rupee-dollar rate for "a few days" before taking any decision on cutting rates.

Amid growing street protests and unease within his own party, Oil Minister S Jaipal Reddy came out to defend the third price increase in a year and the first in almost seven months, saying the oil companies had exhausted all options. Breaking his silence over the hike announced by oil companies on Wednesday, Reddy said: "All political parties including my own party (Congress) are populist… (but) we cannot run the country on populist sentiments".

State-owned oil companies had lost over Rs 7,100 crore in last two years on selling petrol despite having freedom to adjust rates in line with cost and in April and May this year they lost Rs 2,330 crore. "We are duly conscious of the sense of disturbance among consumers (caused due to the price rise)," he said adding the hike was necessitated due to "double disaster" of devaluation of rupee against the US dollar and increase in international oil prices.

There is a downward trend in international oil prices but it would be hasty to arrive at a conclusion that retail pump prices can be reduced on the basis of this trend of few days. "We are not able to take a definitive view because there is lot of volatility in value of rupee vis a vis dollar and volatility in prices of crude oil," he said.

"We have decided to watch (the situation) for just a few days… and when I say few days it is days not week… we want to know (if this) is a stable trend (and) we will come back to you (about a reduction in rates)," he added. Asked about the opposition to the price hike from within his own party, Reddy said, "The Congress party is also a political party and like all other political parties (it) doesn`t want to advocate unpopular causes even if they are unequivocal causes".

"This is politics, not physics," he remarked. "The government cannot remain indifferent to the people`s feelings," he said as the clamour for a rollback from within the Congress party and its allies grew louder. Oil companies revise petrol prices on 1st and 16th of every month on the basis of average international oil price and the foreign exchange rate in the previous fortnight.

Gasoline price, against which petrol price has been benchmarked, has come down from USD 124 per barrel (that was the basis of Wednesday`s steep hike) to USD 117 a barrel. Rupee has come back from its sub-56 levels to close at 55.37 to a dollar today but is still lower than Rs 53.17 to a dollar that was taken into account for the price hike. If it appreciates further, there will be a scope for price cut. "I will take a view what trend is likely to be. I want to have a feel (of lower oil prices first)," Reddy said. "Rupee has depreciated steeply. We dont know when it will stop. Therefore I would like to watch (for sometime)."

Asked about the timing of the price revision which the oil companies avoided on the eve of assembly elections in five states including Uttar Pradesh and announced it only after the government got Budget passed in Parliament, he said, "Is there a good time for increase in price? There is no good time". Reddy said while the decision to increase the price was "harsh and unpleasant", the hike was warranted due to the poor financial state blue chip oil companies had landed into.