Oil Firms Pressurize Government for Hike in Crude Oil Price

Monday, April 2nd, 2012 | by

There could be yet another disruption of fuel supplies if state owned oil companies are not allowed to hike the price of petrol. The oil firms have asked for an alternate solution of compensation, for the Rs 48 crore they lose each day. They have also demanded a cut in the excise duty on petrol. But the Ministry of Petroleum and Natural Gases have declared that they have not yet taken a decision regarding the matter.

“The situation is very critical. We are losing Rs 7.67 per litre on petrol and after adding 20 per cent sales tax, the desired increase in rates in Delhi is Rs 9.20 per litre,” said RS Butola, Chairman of Indian Oil Corp.

Butola said that the Central Government is actually making a profit of  Rs 14.78 per every litre of petrol that is sold in excise duty and state governments earn between Rs 10 to 20 per litre. However, the oil companies do not make any kind of earning, with pricing going in for a decontrol by the government in June 2010.

“Our 93 per cent of cost of production is on account of crude oil, which we have to import. If we don’t earn revenues from fuel sales, we would not be able to buy crude oil and if we are unable to buy crude, there will be fuel supply disruptions,” he said.

“I don’t know whether the proposal is pending with the ministry or other appropriate authority. The company has requested the government for either compensate the under recoveries on petrol or reduction in the appropriate statutory dues. If that is done than there is no need to increase the price,” he said.

The oil PSUs are insisting on compensation from the government to make good the losses they have been incurring so far.  “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. We haven’t so far heard from the government.”

There has been no clarification from the Central ministry regarding the matter. “I can’t say anything unless we take decision on facts,” said Jaipal Reddy, Minister of Petroleum and Natural Gases.

A review of retail prices are sent to the central ministry by Indian Oil, Hindustan Petroleum and Bharat Petroleum.

Short URL: http://indiawires.com/?p=9526

Leave a Reply


    • Should B.S Yaddyurappa become BJP Karnataka Presidant

      View Results

      Loading ... Loading ...
  • Popular Posts

    © 2012 IndiaWires. All Rights Reserved. Log in

    Designed & Maintained By Pyrumas

    Subscribe Newsletter