The oil ministry will seek compensation from the finance ministry for losses suffered by state-owned fuel retailers due to maintaining petrol and diesel prices despite a hike in crude prices in the past eight months, a top official said today.
Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) posted a combined net loss of Rs 21,201.18 crore in April-September.
This loss would have been higher but for them, the LPG subsidy of Rs 22,000 crore in previous years is yet to be received.
“The loss for the first half is publicly available. Add LPG subsidy to this and you arrive at an estimated loss.
He said since maintaining prices has benefited the economy in terms of not adding to the already high inflation rate, there is a case for compensating oil marketing companies (OMCs).
“Petrol and diesel prices are deregulated (not controlled or fixed by the government). OMCs are free to fix daily rates based on benchmark international oil prices. But they decided to keep the prices in check at their will is,” he said. Told.
The oil ministry will calculate the likely loss for the entire financial year before approaching the finance ministry for compensation.
Three fuel retailers are still making losses on sale of auto fuel despite softening in international rates.
They have not changed prices since April 6, despite international oil prices hitting a more than a decade high.
The government in October gave a one-time grant of Rs 22,000 crore to three firms to cover losses on sale of domestic cooking gas (LPG) over two years starting June 2020.
The oil ministry had asked for Rs 28,000 crore for LPG losses, but they got Rs 22,000 crore.
The softening of international oil prices raised hopes of a cut in petrol and diesel prices.
Crude oil imported by India had shot up to $116 a barrel in June, but declined to $83.23 this month.
If the price reduction happens, it will be the first cut since May 22 when the government cut excise duty to protect consumers from higher global prices and check inflation.
Petrol and diesel prices are expected to be revised daily, but state-owned fuel retailers have not exercised their rights since April 6. The prices have remained stable since May 22, except on May 22 when the prices were reduced following the reduction in excise duty.
Petrol and diesel prices were increased by Rs 10 per liter before the April freeze.
Petrol currently costs Rs 96.72 a liter in the national capital and diesel costs Rs 89.62.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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