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International crude prices are expected to continue to rule high even during the low-consumption summer months.
The ongoing political unrest in Venezuela, the world's fifth largest producer of crude, and the decision by the Organisation of Petroleum Exporting Countries (Opec) to cut production by 4 per cent from April are keeping sentiments hard.
Low oil stocks in the US, the world's largest consumer of petroleum products, has also pushed up prices above the level prevailing during last year's Iraq war. Last week, Brent crude touched a two-year high of $34.73 a barrel.
Unless non-Opec oil producers raise production and Iraqi oil exports register a significant growth, oil industry experts see no softening of crude prices any time soon.
However, the International Energy Agency has forecast that prices may start declining gradually from mid-2004, with an expected 10 per cent seasonal fall in oil demand and an increased quantity of non-Opec oil coming to the market.
Among the non-Opec countries, Russia is expected to lead the output charge. During the current year, its production is expected to go up 7 per cent to 9.1 million tonnes. The other countries that might join in the race are Canada, the United States and Brazil.
The Australian Bureau of Agricultural and Resources Economics predicts a rosy picture for 2005 when, it says, oil prices will average 12 per cent lower at $24 a barrel against the current year's average of $27.
It also attributes the expected fall in oil prices to a possible increase in production by non-Opec countries and an increase in Iraqi oil exports.
Global consumption of oil, Abare says, is expected to go up 1.5 per cent to 79.6 million barrels a day this year.
Most of this may be due to an increase in consumption in non-OECD (Organisation of Economic Cooperation and Development) countries like India and China.
While China is expected to lead in global oil consumption, with its offtake expected to rise 6 per cent this year, US consumption is seen rising over 1 per cent from the current 20 million barrels a day.
Adds PTI: India's oil imports in the current fiscal will rise 5 per cent over 2002-03 in volume terms, even as state-owned oil companies have taken a "conscious decision" not to increase oil prices.
"The oil import bill of the country will be higher by about 5 per cent in volume terms during the current fiscal on account of increased consumption," Petroleum and Natural Gas Minister Ram Naik said.
However, the final oil import figures in value terms were still not available due to fluctuations in prices all year round, he said.
In 2002-03, 88.73 million tonnes of oil -- constituting about 70 per cent of the country's oil requirements -- were imported for Rs 84,401 crore (Rs 844.01 billion).
Naik said oil public sector undertakings had taken a "conscious decision" not to increase oil prices and burden consumers. He added that the Cabinet had endorsed their decision.
The oil PSUs had made profits of over Rs 23,000 crore (Rs 230 billion) last year and if they wanted to pass it to consumers they could do so, Naik said, adding that the revision in retail oil prices depended on the movement of international crude prices.
"Since April 2003 oil prices have been reduced five times and hiked three times resulting in a net decline of 75 paise per litre for diesel and petrol," Naik said.
"Today is World Consumer Day and suppliers (oil companies) are taking care of consumers," he said, adding that for oil marketers there was an under-recovery of Rs 106 on every cylinder of liquid petroleum gas (LPG) and Rs 3 on every litre of kerosene distributed through the public distribution system.
The government has scheduled the fifth round of National Exploratory Licencing Policy in May, which will include the third round for coal-bed methane blocks, he said.
On the supply of compressed natural gas (CNG) to Mumbai, he said there was a scarcity of land in the city for setting up CNG dispensing stations, while in the suburbs 11 centres were coming up.