Industry & Economy
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Petroleum
New kerosene sharing formula for oil PSUs
Our Bureau
New Delhi
,
Dec. 22
THE Government has reallocated the market share of kerosene sold by public sector oil marketing companies and in the process provided 4.7 per cent of the market to private operators.
Under the new sharing formula, Indian Oil Corporation (IOC) has been allowed to surrender the kerosene allocation of its subsidiary IBP Ltd to Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL).
According to the Government decision, the new allocation is proportional to the market share that the three oil companies have in regard to sale of petrol and diesel.
According to IOC Chairman, Mr M.S. Ramachandran, IOC wanted to surrender IBP's share of kerosene business since the latter's kerosene allocation was higher than its market share in petrol and diesel.
IOC and IBP together hold 51 per cent market share in fuel sales but together they market 65 per cent of PDS kerosene in the country.
The main gainer from the reallocation is IOC since the new equation reduces the subsidy brunt borne on sale of kerosene.
IOC, BPCL, HPCL and IBP Ltd sell kerosene at a Government controlled price of Rs 9.01 per litre and in the process lose around Rs 6.96 per litre.
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