Indian Oil Corp is trying to resist political pressures that threaten its profitability in the name of consumer interest. Its chairman and managing director B M Bansal says absorbing or delaying a hike in the price of decontrolled fuel like petrol is not desirable .
Speaking to the Hindustan Times, Bansal said, “I have no choice. If the international crude oil prices continue to increase, I will have to further increase the price of petrol.”
On increasing petrol prices six times after its de-regulation on June 26, Bansal said, “We do not get any fun in doing so. The choice is either to let go off the company’s interest, which is already bleeding because of selling other fuels at a loss, or take a decision which saves the company.” “It is not that we are overlooking the public interest. Even after the de-regulation of petrol prices we have always keeping some part uncovered, hoping that tomorrow if the global crude oil prices come down, then I can break even.”
Bansal said that after the recent hike of R2.50 per litre, oil companies are still bearing a loss of R1.20 on every litre of petrol sold. He said that before the de-regulation of petrol prices, the situation was completely different as the under-recoveries on sale of petrol were being compensated by the government.
He said IOC will report net loss in the third quarter ending December 31, 2010, unless the government compensates it for revenue loss due to selling auto and cooking fuels below cost.
Oil companies is also losing R6.80 per litre on diesel, R18.66 per litre on kerosene and R 366.28 per 14.2-kg LPG cylinder.