Worried Reddy meets FM on bleeding oil PSUs | business | Hindustan Times
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Worried Reddy meets FM on bleeding oil PSUs

Petroleum minister S Jaipal Reddy on Friday met finance minister Pranab Mukherjee and discussed the deteriorating financial state of oil companies currently incurring losses of Rs 450 crore per day for selling auto and cooking fuels below the cost price. HT reports.

business Updated: Jun 10, 2011 21:05 IST
HT Correspondent

Petroleum minister S Jaipal Reddy on Friday met finance minister Pranab Mukherjee and discussed the deteriorating financial state of oil companies currently incurring losses of Rs 450 crore per day for selling auto and cooking fuels below the cost price.

"I am concerned about the increasing under-recoveries (revenue losses) of oil marketing companies (OMCs)," Reddy told reporters after his meeting with Mukherjee. "Everyday OMCs are incurring under-recoveries of about Rs 450 crore."

An empowered group of ministers (EGoM) headed by Mukherjee, which decides on revising the rates of sensitive products, has not met since June last year, even though crude oil prices have spiralled by about 50%. The EGoM was originally scheduled to meet on May 11, but was postponed at the last moment.

No new date for the EGoM meeting has been fixed yet, Reddy said. His ministry is pushing for a Rs 3-4 per litre hike in diesel and Rs 20-25 per cylinder increase in LPG rates.

State-owned oil firms had last month hiked petrol prices by a steep Rs 5 per litre and are looking at another increase next week.

Oil companies are losing Rs 14.2 on the sale of every litre of diesel at the current price of Rs 37.8 per litre in Delhi. Besides, state-owned oil firms lose Rs 27.5 a litre on kerosene and Rs 381.1 per 14.2-kg domestic LPG cylinder.

The three firms may end the fiscal with a revenue loss of Rs160,568 crore, at least half of which will have to be met by the government from its Budget.