Govt pitches for petro price hike

Making a strong case for increasing prices of petrol and diesel, the government on Tuesday said cash loss of four major oil companies was alarming at a whopping Rs 1516 crore (Rs 15.16 billion) in a single month of July this year due to steep rise of $6 in global crude oil prices.

Indian Oil Corporation suffered a loss of Rs 564 crore (Rs 5.64 billion) in July, HPCL Rs 343 crore (Rs 3.43 billion), BPCL Rs 425 crore (Rs 4.25 billion) and IBP Rs 184 crore (Rs 1.84 billion), Petroleum Minister Mani Shankar Aiyar told the Rajya Sabha.

Making a statement to a calling attention on the issue, he said the four companies suffered a net loss of Rs 1227 crore (Rs 12.27 billion) in the first quarter of this fiscal even after upward revision of prices of petrol and diesel on June 21.

"The new and very disturbing trend is that our navratna and mini-ratna oil companies are beginning to suffer net or cash losses, seriously incapacitating their abilities to meet capital expenditure targets or maintain dividends on equity," Aiyar said painting a gloomy picture of the oil majors due to under-recovery of cost of petrol, diesel, PDS kerosene and domestic LPG.

During April-June 2005, under recovery of oil companies in respect of petrol and diesel was estimated to be Rs 4,900 crore (Rs 49 billion) and on PDS kerosene and domestic LPG Rs 4,800 crore (Rs 48 billion), he said adding in a full year of 2005-06, the under-recoveries could exceed Rs 40,000 crore (Rs 400 billion) as per the current trend.