NEW DELHI, Mar 31, 2012: State-owned oil firms are pushing for at least Rs 3 per litre hike in petrol price from April 1 to cover part of the spike in cost of raw material. "We are losing Rs 6.43 per litre on petrol and after adding 20% sales tax, the desired increase in rates in Delhi is Rs 7.72 per litre," a senior oil company official said. "We understand that it will be difficult to raise rates by Rs 7.72 per litre in one go but a Rs 3 or even Rs 4 a litre increase is feasible," he said. As per practice, oil companies are due to review fuel prices tomorrow. Indian Oil Corp (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) use fortnightly average of benchmark oil price and exchange rate to fix the price to be paid to refineries on 1st and 16th of every month. If the changes do not reflect in retail selling price, they become losses in the books of oil firms. The international price of gasoline (against which domestic petrol prices are benchmarked) have risen from $109 a barrel at the time of last revision in December 2011 to $133-134 per barrel. Oil firms had last revised dates on December 1 when rates were cut by Rs 0.78 per litre. Petrol at IOC pumps in Delhi is currently priced at Rs 65.64 per litre and the rates vary by a couple of paise at the pumps of BPCL and HPCL. Petrol price was freed from government control in June 2010 but public sector companies continue to informally consult their parent Oil Ministry before taking a decision. "We are holding consultations," the official said, dropping hints that oil firms have so far not received a go ahead from the government for raising prices.
Oil firms lost about Rs 4,500 crore this fiscal on selling petrol below cost. The government does not compensate them for this loss as petrol is a decontrolled commodity.
Oil firms lost about Rs 4,500 crore this fiscal on selling petrol below cost. The government does not compensate them for this loss as petrol is a decontrolled commodity.