BP says price controls "not good", days after India cuts cost of fuel

By Promit Mukherjee and Sudarshan Varadhan

NEW DELHI, Oct 15 (Reuters) - Global oil major BPsaid on Monday fuel price controls are "not good", days afterIndia asked state-run fuel retailers to shield customers fromrecord-high costs by cutting margins.

BP has a tie-up with Reliance Industries, owner ofthe world's biggest refining complex, to enter India'sdownstream sector including retail fuel sales.

"Price controls will not be good for the fuel sector,"Dudley said at the IHS CERA conference. He declined to say whenBP would open its first fuel retail outlet in India inpartnership with Reliance.

India cut taxes on diesel and gasoline this month and askedstate companies, which account for the bulk of retail fuel salesin the country, to reduce marketing margins after a publicbacklash against record-high pump prices.

The move was widely seen as government intervention in localfuel pricing, although Finance Minister Arun Jaitley and OilMinister Dharmendra Pradhan had said the step should not be seenas going back to a regulated regime.

The government has since said it would not interfere withmarket-determined prices of gasoline and diesel.

BP, which has tied up with Reliance to explore gas fields inIndia, expects to have a 10 percent gas market share by 2022,Dudley said, adding that he expects BP India's gas productionwith Reliance to be 1 billion cubic feet in five years.

Dudley said slow decision-making had in the past curbed itsinvestment in the country and was not good for "brand India".(Reporting by Promit Mukherjee; Editing by Dale Hudson)