New Delhi: India’s No. 1 oil retailer Indian Oil Corp is losing Rs1.7 billion ($43.1 million) a day from selling cheap fuels and the government must allow prices to be market driven, its chief said on Thursday.
India caps prices of widely consumed fuels to protect the poor and help trim inflation and didn’t increase rates of petrol and diesel in 2007 despite global crude roaring to a series of historic highs, jumping by more than half over the year.
Oil dipped slightly after leaping to a lifetime high of $100 on Wednesday fuelled by expectations of thinning US stockpiles.
“We must find a lasting solution to this and not an ad hoc solution as these prices are likely to stay,” IOC chairman Sarthak Behuria said.
A senior oil ministry official said on Wednesday that a modest hike in retail prices of key fuels was likely in the first week of February.
IOC’s director of finance, S.V. Narasimhan, said the firm’s current revenue loss on the sale of petrol was Rs9.20 per litre, while it was losing Rs10.9 on a litre of diesel.
The firm was suffering a revenue loss of Rs331 per cylinder of cooking gas.