Reddy rules out hike in oil prices
17 Feb 2011
State-owned fuel retailers continue to incur losses on diesel sale at a record Rs10.74 per litre as government bars them from raising rates in line with spurt in cost of raw material (crude oil).
Indian Oil Corp (IOC), Hindustan Petroleum Corp (HPCL) and Bharat Petroleum Corp (BPCL) are forced to sell, domestic LPG and kerosene way below cost as government struggles to get a hold over inflation.
According to an industry official, diesel is being sold a discount of Rs10.74 per litre to its imported cost.
Meanwhile, oil minister S Jaipal Reddy yesterday ruled out a fuel price hike in the face of oil prices touching $100 a barrel.
Retail price of diesel would need to be increased by Rs 10.74 a litre if the government was to implement its June 2010 decision of freeing pricing of most consumed fuel from its control. Losses to the three state retailers are estimated at Rs247crore per day on diesel sale below its imported cost.
The official said it constituted the biggest loss the retailers had ever incurred. In addition to diesel, IOC, BPCL and HPCL are suffering losses of Rs21.60 per litre on kerosene and Rs356.07 per 14.2-kg LPG cylinder which translate in to a cumulative loss of Rs430 crore in revenues every day.