The Hindu Business Line : Oil industry suffers Rs 500-crore loss in January-April

THE oil industry in the country suffered a loss of Rs 500 crore during January-April 2004 as petroleum companies were unable to hike the selling price of petrol and diesel in tandem with increase in crude prices.

The loss does not include the cost of liquefied petroleum gas (LPG) and kerosene that are being sold at subsidised rates.

Answering questions at a press conference here today, Mr M.S. Ramachandran, Chairman, Indian Oil Corporation, said international oil prices were quite high and was a source of concern.

However, he pointed out that a number of countries, including Sri Lanka, had not increased prices of petroleum products.

Oil companies here have been asking for a hike in petrol and diesel prices. When the administered pricing mechanism for petroleum products was dismantled in April 2002, the crude price for India was about $20 per barrel and this had now increased to over $35.

Mr Ramachandran suggested creating a price stabilisation fund that would help hold prices stable for consumers and at the same time help petroleum companies.

He declined to divulge the quantum of price increase that was required to make good the increase in crude prices.