New Delhi: The government on 15 May ruled out any immediate hike in domestic petrol and diesel prices in the wake of rise in international crude oil prices.
“International prices are volatile due to huge speculation. We cannot keep changing prices every day,” Petroleum Minister Murli Deora told reporters here.
Deora said UPA chairperson Sonia Gandhi has clearly asked the government not to raise kerosene and LPG prices so as not to burden the common man. “Our endeavour will be to keep the price line unchanged,” he said.
Indian Oil Corporation chairman Sarthak Behuria said public sector oil companies are likely to incur a loss of Rs50,000 crore in the current fiscal on selling fuel below cost.
“At current price level, IOC is losing Rs85 crore a day on sale of petrol, diesel, LPG and kerosene,” he said.
Oil companies are selling petrol at a loss of Rs5.24 a litre, diesel Rs4.40 a litre, kerosene at Rs14.67 a litre and LPG (cooking gas) at a loss of Rs 167 per cylinder.
“At current prices, we estimate that the under-recoveries for the entire industry during 2007-08 will be about Rs50,000 crore,” he said.
On under-recoveries, Deora said the previous year’s formula of sharing the revenue losses between upstream companies, government and refining firms would continue.
ONGC, Oil India Ltd and GAIL will be asked to bear one-third of the under-recoveries and a similar amount will be provided by the government by way of bonds.
“We will shortly initiate discussions with finance ministry on issue of oil bonds,” Deora said.
Behuria said the current fiscal was better than last year as refining margins were better. IOC is currently earning a margin of 9-10 dollars on processing every barrel of crude oil compared to 4.5-5 dollars last year.