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Public sector oil marketing companies will continue to maintain a discount of Re 1 a litre on petrol and diesel, till being asked not to, by the Centre.
Speaking on the sidelines of the Energy Forum, Hindustan Petroleum Chairman, M K Surana, told BusinessLine , “The price cut has been effected as per the directives of the Finance Minister. It is in the national interest.”
Surana said there has been no official letter or communication from the Centre to regulate prices.
On Thursday, Finance Minister Arun Jaitley had asked PSU oil companies to cut the price of petrol and diesel by Re 1 each. This was in addition to an excise duty rollback of Re 1.50 a litre on both fuels.
Oil companies price auto fuels by benchmarking them to international prices, according to a formula.
Explaining the mechanism for the price lowering, Surana said, “Whatever be the price according to the formula, it will be lowered by a rupee till further notice from the Centre.”
Despite the Centre’s directive, the oil companies maintained that prices of auto fuels are deregulated. Oil company officials said the government in its capacity as the largest shareholder can direct the price lowering.
“The impact of the Re 1 hit on margins will be lowered from the revenues while reporting results,” Surana said.
Indian Oil Chairman, Sanjiv Singh said, “Petrol and diesel prices continue to be deregulated. The impact of the Re 1 per litre cut on revenue is expected to be Re 4,000- Re 5,000 crore for the next six months.”
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