Click to play videoNew Delhi: Union Finance Minister P Chidambaram while speaking in the debate on the supplementary demand for grants in Parliament on Tuesday, said there would be no fuel price cut as of now.
Chidambaram said that oil marketing companies are still making under recoveries and so as of now there cannot be roll back in fuel prices.
"When the crude oil prices come down to $67/bbl then we will be breaking even. Even at $71-72/bbl there is element of subsidy, there is an underecovery. The underrecovery has come down. We are not making any profit. To assume that oil PSUs are making profit is wrong assumption. But we sincerely hope that oil prices will come down," he said.
He also talked about the expected liquidity that will come from the recent cuts in CRR and repo rate cuts.
"We are in a situation where our banking and our financial system is stable. At this moment we must stimulate the economy. The steps that we have taken on the CRR and the repo rate intended to stimulate the economy even while we continue to pay attention to inflation," said Chidambaram.
Meanwhile, crude prices which have been falling recently because of anticipated slow down in growth and demand could rise again because of production cuts.
Iran's Oil Minister has said that drop in demand could push Organisation of the Petroleum Exporting Countries (OPEC) to cut output by 2 to 2.5 million barrels per day.
The OPEC meets on Friday in Vienna amid pressure for a production cut. Oil prices have fallen to half their July peak of $147 a barrel to about $74.
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