Date:16/05/2007 URL: http://www.thehindubusinessline.com/2007/05/16/stories/2007051605191000.htm

Back No hike in petrol, diesel prices for now

Our Bureau

Crude oil basket rises by 74 cents to $65.18

Oil woes
To compensate the public sector oil companies for the under-realisation incurred, the previous year's formula of sharing the revenue losses between upstream companies, Government (oil bonds) and refining firms would continue.
Oil companies are incurring a loss of Rs 5.24 per litre of petrol, Rs 4.40 on diesel, Rs 14.67 on kerosene and Rs 167 per cylinder of LPG.

New Delhi May 15 Consumers of petrol and diesel can breathe easy for sometime, with the Government today ruling out any immediate hike in retail selling prices of petrol and diesel.

With the crude oil basket continuing its northward trend, the under-realisation suffered by state-owned oil marketing companies on sale of petroleum products has also been on an upswing.

The country's crude oil basket on Monday went up by 74 cents a barrel to $65.18.

Speaking to newspersons, the Petroleum Minister Mr Murli Deora said: "International prices are volatile due to huge speculation. We cannot keep changing prices every day. Our endeavour will be to keep the price line unchanged."

He added that the UPA chairperson, Ms Sonia Gandhi, said that the Government should not raise kerosene and LPG prices so that the impact of steep rise in crude prices on the common man is cushioned.

Mr Deora also said that to compensate the public sector oil companies for the under-realisation incurred, the previous year's formula of sharing the revenue losses between upstream companies, Government (oil bonds) and refining firms would continue.

"The Finance Ministry has been very co-operative. If required we would seek similar help. However, it is still too early to say."

The IOC Chairman, Mr Sarthak Behuria, said that oil companies are likely to incur a loss of Rs 50,000 crore in the current fiscal on selling fuel below cost.

"At current price levels, while IOC is losing Rs 85 crore a day on the sale of all four products - petrol, diesel, cooking gas, and kerosene - the companies together would be losing close to Rs 150-160 crore a day."

Oil companies are incurring a loss of Rs 5.24 per litre of petrol, Rs 4.40 on diesel, Rs 14.67 on kerosene and Rs 167 per cylinder of LPG.

However, there was some respite for IOC on the refining margin front.

Mr Behuria said that the current fiscal is better than last year as refining margins are better.

IOC is currently earning a margin of $9-10 on processing every barrel of crude oil, compared to $4.5-5 last year.