The government will continue the policy of equitable burden sharing between the state, oil companies and consumers for absorbing the impact of the upward spiral in global oil prices.
"We have a pricing regime which insulates consumers from spiralling international prices. After coming to power, we had formulated an equitable burden sharing policy and it still continues," Petroleum Minister Mani Shankar Aiyar told reporters on sidelines of a CII conference in New Delhi.
The recent Rs 3 a litre hike in petrol and Rs 2 per litre increase in diesel prices was also in accordance to the principal.
"Accordingly, oil companies would bear half of the burden (arising from firming up of international oil prices), the government would take one-third of it on itself and only 14 per cent of the burden has been put on consumers," he said.
Aiyar said the UPA-government's National Common Minimum Programme lays stress on a strong and efficient public sector, which could stand domestic and international competition.
The administrative ministries coordinate between the company goal of strong bottomline (profit) and larger issues like energy security and well-being of masses, he said.
"(While) it is the duty of oil PSUs to defend their investment (by seeking increase in fuel prices in step with rising crude oil prices), government has to consider the people at large and their means to meet the felt demand," he said.
Public sector oil firms have sought another hefty raise of Rs 8.52 a litre in petrol price and Rs 4.81 a litre increase in diesel price, saying they were losing Rs 1,013 crore every fortnight on selling fuel below imported cost.
Oil companies had raised petrol price by Rs 3 a litre and diesel by Rs 2 per litre from September 7 but the current retail prices were far below the imported cost.
Indian Oil Corp, Bharat Petroleum Corp Ltd, Hindustan Petroleum Corp Ltd and IBP Co Ltd have projected loss of Rs 1,013 crore (Rs 10.13 billion) on selling petrol and diesel in second fortnight of September (after the price hike).
This is over and above the Rs 8,500 crore (Rs 85 billion) revenue loss they had suffered on selling the two automobile fuel from April to September 15.
"The under recoveries (revenue loss) relate to petrol and diesel and do not cover under recoveries on account of subsidised products (domestic cooking gas LPG and kerosene) which are estimated at about Rs 20,000 crore (Rs 200 billion) for 2005-06," the petroleum ministry's internal note said.
LPG and Kerosene price had not been raised despite the oil companies suffering a loss of Rs 103 on selling every LPG cylinder and Rs 13 on sale of every litre of kerosene.
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