‘OMCs lost Rs. 2,468 crore on selling the fuel below cost'
Faced with scathing criticism from the Opposition parties and its own allies for the latest petrol price hike of Rs. 1.82 per litre, the state-owned oil marketing companies (OMCs) on Friday put the ball back in the government's court stating that they were ready to roll back the latest hike if directed by it (government).
Addressing a press conference here, Indian Oil Corporation chairman R.S. Butola said the government had freed petrol prices in June last year and empowered OMCs to decide the retail rates. However, given the ownership structure, the PSUs would abide by the government directive to roll back prices. “We do not plan to affect a rollback of prices, but if we get a directive to roll back prices, we will have to implement that,” Mr. Butola said. He was accompanied by BPCL chairman, R.K. Singh.
Mr. Butola said the OMCs had lost Rs. 2,468 crore on selling the fuel below cost in the first half of the current fiscal. This was on top of the Rs. 2,500 crore loss they incurred in 2010-11. “Given the magnitude of the losses, the choice before us was to either cut down production or pass on the increase to consumers. We chose to raise prices and continue supply lines,” he added.