New Delhi: The government on Monday said that it has no plans to extend financial support to state-owned fuel retailers for the losses they are incurring on selling petrol, diesel and aviation turbine fuel (ATF) below cost.
The statement comes after oil retailers like Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) raised substantial losses on sale of petrol and diesel after they extended a four-year freeze on revision in retail rates despite input crude oil prices shooting up since the start of West Asia conflict over two months back.
They have also, for the first time in more than two decades, begun posting losses on jet fuel (ATF) since last month, as they passed on only a part of the desired increase in prices needed to bring rates at par with cost. “There is no proposal before the government to support oil marketing companies (for their losses),” said Sujata Sharma, joint secretary in the ministry of petroleum and natural gas at a briefing.
While ATF prices for domestic airlines last month increased by 25 per cent – a fourth of the desired increase – there was no change in rates this month, even though the prices for foreign airlines were hiked by over 5 per cent. Similarly, despite under-recoveries of Rs 25-28 a litre, there has been no increase in petrol and diesel prices.
Domestic LPG prices were hiked by Rs 60 per 14.2-kg cylinder on March 7, but that was not enough to cover all the increased cost, and oil companies are booking under-recoveries or losses. The government has, in the past, covered for the under-recoveries on LPG through budgetary subsidy support.
Sharma said there is no increase in retail prices of petrol and diesel, as well as domestic LPG, even though supplies have been disrupted due to the war in West Asia. Only rates of bulk or industrial diesel have been increased. “The bulk diesel and commercial LPG make up for only 10 percent of the fuel,” she said, adding that every effort has been made to protect the consumers.
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