Spurt in international oil prices will cause Rs.80,000 crore of revenue losses
Union Petroleum and Natural Gas Minister Jaipal Reddy on Tuesday said the government had no plans to increase the price of petrol and diesel despite international crude oil rates having touched the $100 per barrel mark.
“We are not at the moment thinking of increasing prices,” he told journalists here.
The spurt in international oil prices meant that state retailers would end the fiscal with around Rs.80,000-crore revenue losses on selling diesel, domestic LPG and kerosene below cost. “The oil marketing companies are facing a burden to the tune of Rs. 80,000 crore and maybe it could touch Rs.100,000 crore this fiscal,” he said.
Referring to petrol, whose price the government had decontrolled last June, Mr. Reddy said there was no proposal to raise prices just now.
The State-owned Indian Oil Corporation, Bharat Petroleum Corporation Limited and the Hindustan Petroleum Corporation Limited, which have raised petrol prices seven times since June last year, currently sell petrol at a loss of Rs. 1-2 per litre. “At the moment, there is no proposal on table of oil companies to increase the price of petrol. Pubic opinion cannot be ignored even in free market,” he remarked.
Mr. Reddy said that half of the revenue loss retailers incurred on selling diesel, domestic LPG and kerosene would be met by the government by way of cash dole-out. Another one-third would be contributed by upstream firms like the Oil and Natural Gas Corporation (ONGC). The rest would “somehow be digested by oil marketing companies.
Petroleum Secretary, S. Sundareshan said that of the Rs. 46,000-crore revenue loss on fuel sales in the first three quarters this fiscal, the government provided Rs. 21,000 crore and upstream firms contributed one-third.
Mr. Reddy expressed hope that the Finance Minister would cut customs and excise duty on crude oil and products in the budget to ease the burden of rising global oil prices.