Fuel price hike not soon
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New Delhi: State-owned fuel retailers may not hike petrol and diesel prices till Assembly elections in five states are completed in May, even though their losses on auto fuel sales continue to mount.
The Oil Ministry maintains it has neither asked the companies to raise rates of petrol nor told them to hold prices but state firms privately admit they are being forced not to hike the price of a fuel that had been deregulated in June last year.
Five states – Assam, Kerala, Puducherry, Tamil Nadu and West Bengal - will go to the polls in April and May this year.
State-run Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum have lost about Rs. 2,000 crore because of not raising petrol prices in sync with international rates, an official with direct knowledge of the development said.
"The three firms are losing Rs. 4.03 per litre on petrol, a commodity that was freed from government control more than eight months back," he said.
Sudhir Bhargava, Additional Secretary in the Ministry of Petroleum and Natural Gas, today said: "there is no plan to regulate petrol prices again."
He however refused to say why oil firms were not revising petrol prices despite crude oil ruling at two-and-half-year high.
"Since June, the oil companies have chewed up about Rs. 2,000 crore losses... Rs. 400 crore is what these companies will lose in March alone," an official said.
Chief executives of the three firms had recently given a presentation to the Oil Ministry on the quantum of losses they are suffering, but have not been allowed to hike prices despite crude ruling at a two-year high of over USD 100 per barrel.
The three firms had last hiked petrol price by Rs. 2.50 on January 15. Since deregulation of rates in June, the rates have gone up about Rs. 7 per litre in five installments to Rs. 58.37 per litre.
Besides petrol, the three retailers are losing a record Rs. 12.56 a litre on diesel, Rs. 24.74 per litre on kerosene and Rs. 297.80 per 14.2-kg LPG cylinder.
The three firms are losing a cumulative Rs. 392 crore in revenue every day on selling diesel, domestic LPG and kerosene below cost, the official said.
"For the full fiscal, the three are projected to lose Rs. 77,645 crore in revenues at current prices," he said.
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