State-owned oil cos losing Rs 7.72 per litre in petrol

Indian Oil Corp (IOC) today said state-owned oil firms are losing Rs 7.72 per litre on selling petrol as they have not been able to revise prices despite 23 per cent jump in international rates.

"We are losing Rs 6.43 per litre on petrol and after adding 20 per cent sales tax, the desired increase in rates in Delhi is Rs 7.72 per litre," IOC Chairman R S Butola told reporters on the sidelines of 7th Asia Gas Partnership Summit here.

The international price of gasoline (against which domestic petrol prices are benchmarked) have risen from USD 109 a barrel at the time of last revision in December 2011 to USD 134 per barrel at present.

State-owned oil companies like IOC use fortnightly average of benchmark oil price and exchange rate to revise retail rates on 1st and 16th of every month.

Oil firms had last revised dates on December 1 when rates were cut by Rs 0.78 per litre. Petrol at IOC pumps in Delhi is currently priced at Rs 65.64 per litre and the rates vary by a couple of paise at the pumps of Bharat Petroleum and Hindustan Petroleum.

Petrol price was freed from government control in June 2010 but public sector companies continue to informally consult their parent Oil Ministry before taking a decision.

"We have the freedom and can increase prices but we live in an environment? and have considered ability of consumers in not passing on the increase," Butola said.

He said oil companies have requested the government to compensate them for selling petrol at rates below cost just like it does for diesel, domestic LPG and kerosene.

"We (IOC) lost Rs 1,255 crore in first nine months of current fiscal on selling petrol below cost and over Rs 750 crore in the fourth quarter," he said, adding the loss on petrol for the industry would be around Rs 4,500 crore.

The government makes up roughly half of the cost that retailers lose on selling diesel, domestic LPG and kerosene below cost.

IOC, BPCL and HPCL together are projected to lose about Rs 140,000 crore this fiscal. So far, the government has promised to give Rs 45,000 crore in cash.

The government continues to control rates of diesel, domestic LPG and kerosene which were sold way below cost to keep inflation under check. The oil firms lose Rs 14.73 per litre on diesel, Rs 30.10 a litre on kerosene and Rs 439.50 per 14.2-kg LPG cylinder.

Source: http://www.mydigitalfc.com/news/state-owned-oil-cos-losing-rs-772-litre-petrol-845

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