The three oil majors — Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) — on Tuesday asked the government to either increase petrol price by Rs 8 a litre to compensate for under-recoveries, or declare it a regulated product and provide 100% compensation to oil companies.
The Reserve Bank of India (RBI) on Monday cautioned the government to increase fuel prices in order to prevent fiscal slippages.
Speaking on behalf of the three oil companies, IOC said the current situation where oil companies have to import crude oil at higher prices — in the range of $121.3 per barrel — they cannot continue selling petroleum products at lower prices.
“This situation cannot continue,” Indian Oil said, adding that such pricing will only impede the ability of the companies to import crude oil and may affect supply-demand balance.
To make up for losses on other products (diesel, cooking gas and PDS kerosene), oil companies have also sought a cash compensation of Rs 75,620 crore from the government.
They have also asked both the central and state governments to reduce huge taxes and duties levied on the petroleum products.