The union government can lift the administrative control over petrol and diesel. The final decision would depend on the crude oil prices in the international market for at least two months. The crude oil prices are fluctuating at $40-$45 as of now. If the present trend continues till February, there are maximum chances of lifting the administrative control over petrol and diesel.    

It is recalled that the government had freed petrol and diesel prices from administrative control in April 2002, paving a way for retailers to adjust prices according to the fluctuation in crude prices in the market. But the decision was rolled back in 2004 when crude oil rose to $37 a barrel.

Now, crude prices are coming down and it's a good opportunity to free the petrol and diesel from government's control. An official in the petroleum ministry said that the recent oil price cut is an interim measure. Government is watching the trends in the crude prices in the international market and can take final decision on the new mechanism by mid-February.                                                                                               

Interestingly, oil marketing firms are making Rs 9.89 a litre profit on petrol and Rs 1.03 per litre on diesel despite price cut by the government a month ago. However, oil firms are experiencing losses on domestic LPG and kerosene due to high subsidies.