New Delhi: State-owned Indian Oil Corp, the nation’s largest oil firm, today hinted at an imminent hike in petrol prices, whose rates have not been revised since January in view of elections in states like West Bengal.
“We would do it (increase rate) at the earliest possible,” IOC chairman Ranbir Singh Butola told reporters here.
In his first interaction with media after taking over as the chairman of the nation’s largest fuel marketing firm, Butola said IOC and other state firms had consciously decided not to revise rates of petrol to keep “the environment happy”.
The government had in June last year freed petrol pricing from its control and state-run firms had on as many as seven occasions changed rates in line with international prices before deciding in the second half of January to freeze rates.
“We live in an environment (comprising of the people and the government). If we take certain action, the environment is going to turn against us,” he said.
IOC is losing a tad less than Rs 7 per litre on petrol currently. After including the local sales tax or VAT, the desired increase in price comes to about Rs 7.50 a litre in Delhi.
“In our consideration, we decided to take these losses for sometime,” Butola said.
Asked if the petrol price will be revised soon after assembly elections are completed on 10 May, he said a review “will take place soon.”
He, however, deflected questions on state firms acting at the behest of the government in not revising petrol prices.
IOC was losing Rs 297 crore per day on selling diesel, domestic LPG and kerosene at government-controlled rates, he said.
“We are losing Rs 18.11 per litre on diesel, Rs 28.33 a litre on kerosene and Rs 315.86 per 14.2-kg domestic LPG cylinder,” he said.
The company, whose debt is growing at Rs 5,000-6,000 crore every month on unchanged fuel prices, expects government to compensate it for the losses.
Its debt stood at about Rs 53,000 crore at the end of March.
While retail price of petrol is benchmarked at $98 per barrel of international rates, the same for diesel is at $72-73 equivalent.
The basket of crude oil that India buys averages $120 per barrel currently.
The government had in June last year allowed state-run oil firms to fix the price of petrol but continued to control the prices of diesel, kerosene and cooking gas with a view to control inflation.