New Delhi: The government on April 17 ruled out any immediate increase in petroleum product prices despite the surge in international crude oil prices, saying the national oil companies had enough strength to absorb $ 4 per barrel increase in the oil price.

"When we compare common man's capacity to absorb the shock with that of the oil companies, the latter is in a better position to sustain losses for a while," Petroleum Minister Ram Naik told reporters in New Delhi.

The government, he said, had not instructed the oil companies to maintain the price line of petroleum products at the current level, Naik said, adding "what we desired is a smooth switchover from an administered regime to a deregulated market. Any company in a free market has to take into account sentiments of consumers."

Naik said Petroleum Ministry has petitioned the Finance Ministry for duty changes, particularly excise duty cut, to absorb the impact of hike in crude oil prices, which were ruling over $ 24 a barrel now.

"Current prices of 22-24 dollars per barrel are not volatile enough to warrant duty cuts. As and when they turn volatile, duty changes would be effected," he said, adding a mechanism has been devised for domestic pricing of petroleum products linked to crude oil prices.

Asked what he considered volatile prices, Naik said, "Last year we experienced extreme volatilities when crude prices crossed 29-30 dollars per barrel."

Oil companies are incurring a loss of about Rs 1,000 crore on the surge in international prices as domestic petroleum product prices were fixed on the basis of crude prices at $ 20 a barrel.

PTI