With oil prices touching a record high and nearing $100 per barrel, the government has decided to put off a decision on addressing the concerns of oil marketing companies to next week. The Indian crude-oil basket touched a record $89.36 a barrel on Tuesday.
Oil marketing companies like Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited are currently losing over Rs 240 crore per day on the sale of petrol, diesel, domestic LPG and PDS kerosene and a loss of Rs 4.94 on sale of every litre of petrol, Rs 6.50 per litre on diesel, Rs 16.42 a litre on kerosene and Rs 207 per LPG cylinder.
“We are trying to find a solution to the issue by next week,” Petroleum Minister Murli Deora told newsmen on the sidelines of India-Africa hydrocarbon conference. The government has three options to help the oil marketing companies withstand the steep under recoveris they face by selling petrol, kerosene, diesel and liquefied petroleum gas below cost.
The government could consider increasing the retail prices of motor fuels marginally or reduce the excise duty paid by the public sector oil companies on the gate price of the fuels. The option of raising the quantum of oil bonds to be issued by the finance ministry.
The government could consider increasing the retail prices of motor fuels marginally or reduce the excise duty paid by the public sector oil companies on the gate price of the fuels. The option of raising the quantum of oil bonds to be issued by the finance ministry.
“The government is very much alive to the problems faced by our PSUs. We are very worried about the difficult situation that the oil marketing companies are facing,” Deora said.
Prime Minister Manmohan Singh as well as UPA chairperson Sonia Gandhi were opposed to taking a “harsh” decision just before Diwali, sources said. The elections to the state assemblies in Gujarat and Himachal Pradesh could also make it difficult for the government to take tough decisions.