Over the past several months, IOC, BPCL and HPCL did not revise the prices of petrol and diesel in line with the rising cost to help the government control the prevailing inflation of over 7 per cent.
Despite the increase in the cost price to the public sector petroleum companies in the first quarter of the current financial year petrol and diesel prices A total loss of Rs 18,480 crore has been incurred due to keeping the company stable. According to the information given to the stock markets by three state-owned oil companies, their losses increased significantly due to non-increasing prices of petrol and diesel in the April-June quarter. This happened due to the fall in their margins. Apart from petrol and diesel, these petroleum companies have suffered heavy losses due to reduction in the margin of domestic LPG. In such a situation, it may be possible to see an increase in the price of oil to make up for the loss.
Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL) have been empowered to revise the prices of petrol and diesel every day depending on the cost. But under the pressure of rising retail inflation, oil prices have not been increased for four months. During this time, the cost of these companies also increased due to increase in international oil prices. These companies have also not changed the LPG rates of LPG according to the cost.
Record losses to companies
The IOC had said on July 29 last that it had a loss of Rs 1,995.3 crore in the April-June quarter. HPCL on Saturday also reported a record loss of Rs 10,196.94 crore in this quarter, which is its highest loss in any quarter. Similarly, BPCL has also recorded a loss of Rs 6,290.8 crore. In this way, these three state-owned oil companies together have incurred a total loss of Rs 18,480.27 crore in a quarter, which is a record for any quarter so far.
In fact, in the last several months, IOC, BPCL and HPCL did not change the prices of petrol and diesel according to the rising cost to help the government to control the inflation which is more than 7 per cent. In the first quarter, crude oil was imported at an average price of US $ 109 per barrel. However, retail sales rates were maintained at a cost of around $85-86 per barrel. In this way, the oil companies themselves suffered a loss of about $ 23-24 on crude oil per barrel.
Prices did not increase from April 6
The government has said that oil companies are free to change retail prices, but the government has not been able to give a concrete reason for not making any change in retail sales rates since April 6. On one side, oil prices have been kept stable ahead of politically important elections. These three companies had stopped revising rates before the assembly elections in five states, including Uttar Pradesh, last year. That round lasted for 137 days and is running again after the first week of April.
Although the government had cut excise duty on petrol and diesel in May, retail buyers got the benefit of it. The current ban on petrol and diesel prices is now 123 days old, excluding the reduction due to reduction in excise duty. ICICI Securities said in a report last month that IOC, BPCL and HPCL sold petrol and diesel at a loss of Rs 12-14 per liter, affecting their earnings during the quarter.
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