The Hindu Business Line : Oil cos may lose Rs 810 cr if price hike not allowed

OIL marketing companies claim they will lose Rs 810 crore in the first fortnight of April if the Government does not permit an increase in petrol and diesel retail prices.

According to a senior Indian Oil Corporation official, Government-owned oil companies will also bear additional losses of more than Rs 600 crore on account of duty adjustments on cooking gas and kerosene prices, announced in the Budget.

Thus, cumulative losses may go up to Rs 2,300 crore by April-end if the Government does not allow a hike on April 15, officials said.

Indian Oil, which controls more than 50 per cent of the country's oil retail market, will lose Rs 300 crore on petrol and diesel under recoveries and Rs 352 crore on cooking gas and kerosene sales, till April 15, said the official.

The Government has refused to allow any increase in retail prices of cooking and transport fuels in spite of rising crude oil prices. International crude oil prices have been at $55 a barrel levels this month compared with around $ 40 a barrel same time last year.

The oil companies have been asking for a price hike of at least Rs 4 per litre for petrol and Rs 3.50 per litre for diesel. They will also have to pay more for importing Euro III petrol and diesel for supplies to select cities, beginning this month, to abide by Supreme Court guidelines.

With duties on LPG and kerosene revised in the Union Budget, the companies have seen their losses on retail sales of both these products rise. According to a senior official, companies have seen the subsidy related loss on cooking gas sales rise by Rs 10 to Rs 80 a cylinder. On every litre of kerosene sold, companies claim they are losing Rs 10.20 a litre, compared to Rs 7.20 a litre before the Budget. Petrol and diesel prices have not been revised since November 2004.

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