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IOC seeks fuel prices hike to offset revenue loss
With crude oil touching a record 72 dollars per barrel, IOC is seeking a hike in fuel prices to offset the revenue loss.
With crude oil touching a record 72 dollars per barrel, Indian Oil Corp (IOC) is seeking a Rs 5.6 per litre increase in petrol and Rs 7.6 a litre hike in diesel prices to offset the Rs 80 crore revenue loss per day it was suffering on selling fuel below production cost.
"(If crude prices stay at current levels), our revenue loss for the 2006-07 fiscal would be around Rs 30,000 crore," IOC chairman S Behuria told reporters in New Delhi.
The company was selling petrol at Rs 5.67 per litre lower than the imported cost while diesel was being sold at Rs 7.60 a litre discount to the imported cost. Kerosene was being sold at a loss of Rs 13 per litre and the company was losing Rs 191 on sale of every cylinder of domestic cooking gas (LPG).
Behuria said IOC, which controls roughly half of the Indian fuel market, was losing Rs 80 crore per day on selling petrol, diesel, LPG and kerosene below the production cost.
"In April alone, our revenue loss is estimated at Rs 2500 crore," he said.
Sources said the under-realisation in revenue by state-run oil marketing companies -- IOC, Bharat Petroleum Corp and Hindustan Petroleum Corp -- for selling petrol and diesel below their production cost was Rs 883 crore in the first fortnight of April.
This was over and above the Rs 14,756 crore shortfall faced by the OMCs in April 2005-March 2006.
Petroleum Minister Murli Deora is likely to meet Finance Minister P Chidambaram next week to discuss a package of tax measures to help loss-making oil refiners.
