Industry & Economy
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Petroleum
Oil companies seek fuel price hike
Our Bureau
Mumbai
,
March 7
VEHICLE users can expect an increase in petrol and diesel prices next month. According to Dr N. Kannan, IOC's Director (Marketing), oil companies have requested the Government to allow them to hike in prices to cut their losses.
The Government had raised diesel price by Rs 2.12 a litre and petrol by Rs 2.20 per litre on November 4. In the subsequent revision in prices on November 15, petrol prices were slashed by Rs 1.16 per litre but diesel was untouched. Prices have remained untouched since.
Dr Kannan, who is also Managing Director of IBP Ltd, said the increase in excise duties announced in the Union Budget would mean that IOC alone would lose Rs 225 crore on petrol and diesel in a month.
The Budget has imposed a charge of Rs 5 a litre in addition to the 8 per cent basic excise duty on every litre of petrol sold. According to public sector oil company officials, this amounts to an effective duty rate of 38 per cent.
"We are making a loss on petrol. We are selling it at below the refinery transfer price, which is effectively our cost price," said Dr Kannan.
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