New Delhi, Mar 31: State-owned oil companies' losses on petrol sales have climbed to Rs 7.65 per litre but they may not raise fuel prices today pending a clarification from the government on duty reduction and subsidy compensation.
“We are losing about Rs 7.65 per litre on petrol and after adding 20 per cent sales tax, the desired increase in rates in Delhi is Rs 9.18 per litre,” a top oil company official said.
Oil PSUs have asked government to make good the losses they incur on selling petrol if retail selling price of the fuel are not to be increased. Also, they have demanded a cut in the Rs 14.35 a litre excise duty on petrol.
“We had clearly told the government that if these demands are not accepted, then oil companies will have no option but to raise petrol prices,” he said.
“We haven't so far heard from the government and even though today is the day we were to revise prices, we have decided to wait for one more day.”
Indian Oil, Hindustan Petroleum and Bharat Petroleum review retail prices at the end of every fortnight. On 30th/31st and 15th of every month, they use the average price of international benchmark and foreign exchange rate in fortnight to decide what should be the price of fuel from 1st and 16th of every month respectively.
The oil firms may review prices tomorrow. Global gasoline prices (against which domestic petrol prices are benchmarked) have risen from USD 109 a barrel at the time of last revision in December to USD 134 per barrel.
Oil firms had last revised dates on December 1 when rates were cut by Rs 0.78 per litre. Petrol at IOC pumps in Delhi is currently priced at Rs 65.64 per litre and the rates vary by a couple of paise at the pumps of BPCL and HPCL.
As per practice, oil companies were to review fuel prices today. IOC, BPCL and HPCL use fortnightly average of benchmark oil price and exchange rate to fix the price to be paid to refineries on 1st and 16th of every month. If the changes do not reflect in retail selling price, they become losses in the books of oil firms.
Petrol price was freed from government control in June 2010 but public sector companies continue to informally consult their parent Oil Ministry before taking a decision.
Oil firms lost about Rs 4,500 crore this fiscal on selling petrol below cost. The government does not compensate them for this loss as petrol is a decontrolled commodity.
The government continues to control rates of diesel, domestic LPG and kerosene which were sold way below cost to keep inflation under check. The oil firms lose Rs 14.73 per litre on diesel, Rs 30.10 a litre on kerosene and Rs 439.50 per 14.2-kg LPG cylinder.
The government makes up roughly half of the cost that retailers lose on selling diesel, domestic LPG and kerosene below cost.
IOC, BPCL and HPCL together are projected to lose about Rs 140,000 crore this fiscal on selling diesel, domestic LPG and kerosene.