High crude prices keep daily losses near Rs 600 crore for Indian oil PSUs even after duty cuts and hikes

NEW DELHI: Government-owned oil marketing companies -- Indian Oil, Hindustan Petroleum and Bharat Petroleum -- are still losing around Rs 600 crore a day despite the increase in petrol and diesel prices announced on May 25, a senior government official said on Monday.

This is the fourth increase in the prices of the two fuels over the last 10 days. The oil companies raised the price of petrol by Rs 2.61 a litre and that of diesel by Rs 2.71 per litre. The increase takes the cumulative rise in petrol and diesel prices to nearly Rs 7.50 a litre after daily revisions resumed following a prolonged freeze.

"If you look at the global level, the price increase is in the range of 22 per cent for motor spirit (petrol) and 27 per cent for high-speed diesel (HSD)," Joint Secretary in the Ministry of Petroleum, Sujata Sharma, said.

"But in India, the hike is much less. For petrol, it is 7.7 per cent and 8.6 per cent for HSD. But before increasing the prices, the government undertook all the possible measures. The government has reduced excise duty on petrol and diesel by Rs 10 per litre, resulting in a revenue impact of Rs 14,000 crore," she said.

Even after taking all these steps, the oil companies were piling up losses of Rs 1,000 crore a day. "After the price rise, it has reduced, but it is still slightly less than Rs 600 crore per day," she pointed out.

Despite the latest hike in retail prices of auto fuels, the under-recoveries of oil marketing companies remain stubbornly high due to increasing losses in domestic LPG sales and high crude prices, ICRA Senior Vice President and co-group head, corporate ratings, Prashant Vasisht, said. (IANS)

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