Furnace oil price cut by INR 9,000
Tribune News Service reported that providing a huge relief to the recession hit industry, the ministry of petroleum and natural gas has slashed the prices of furnace oil by INR 9,000 per metric tonnes. Furnace oil is a widely used fuel in the manufacturing sector.
Highly placed sources in the ministry informed TNS that since the price of furnace oil is linked to the international price of crude oil, it has been decided to reduce the prices of this oil with immediate effect. As against a price of INR 30,349 per metric tonnes last month, the prices have been reduced to INR 21,674 per metric tonnes now.
Officials said that the huge reduction in demand of furnace oil because of its escalating prices and a drop in its international price prodded the ministry to reverse the prices. When the price of furnace oil was increased in July 2008, the price of crude oil was around USD 140 a barrel. An official said that "Since then the prices have continued to drop and have now gone down to USD 63 a barrel. Thus, the oil companies have been asked to pass on the benefits to the consumers."
The Official said that a number of steel producers, steel rolling companies, textile units and auto industry are the main consumers of furnace oil. However, ever since the prices have been on boil, the industry has been shifting to alternate fuels like power, coal, rice husk and wood. Official added that "In April 2007, the price of furnace oil was INR 18,014 per metric tonnes. Within a year, the prices almost doubled. The demand started decreasing and the industry started shifting to alternative fuels."
Official further added that with global meltdown hitting India, many industrial units started cutting down on production. This alone explains why the demand for furnace oil dropped by almost 10% in a month, as against a gradual drop of 20% in a year.
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