Govt may cut fuel price if crude, currency stable

NEW DELHI (Reuters) - India may consider cutting fuel prices if global crude prices and the rupee stabilise, the oil minister, Murli Deora, said on Wednesday.

India has so far rejected calls to cut prices arguing it raised rates by only 10 percent in June when crude costs had soared, unlike Indonesia, which increased fuel prices by 30 percent in May and is now considering lowering them.

U.S. crude has fallen to $59, down 60 percent from a record high of more than $147 in July, easing the burden on cash-strapped state firms, which sold fuel at low state-set rates when oil was at its peak.

But gains for Indian refiners have been partly offset by the depreciation of the Indian rupee, which fell last month to a record low of 50.15 per dollar as foreign funds fled the tumbling stock market, and was trading at 48.7 on Wednesday.

"We will review fuel prices once the rupee-dollar parity and crude oil stabilise," Deora told reporters.

The federal government fixes the price of petrol, diesel, kerosene and cooking gas to make fuels affordable and to control inflation.

The Indian government, facing key state polls in coming weeks and general elections in 2009, is under pressure to reduce prices.

But oil firms such as Indian Oil Corp, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd are resisting this as their debt burden has increased and quarterly earnings fell sharply.