Indian Oil Corporation, the nation's largest fuel retailer, is likely to hike petrol prices by Rs 0.33 per litre from Tuesday. IOC Chairman B M Bansal said international crude oil prices have risen since the last price revision, necessitating an increase in domestic retail prices.
Three fuel retailers -- Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited -- lost about Rs 26,618 crore (Rs 266.18 billion) in revenues on selling petrol, diesel, domestic LPG and kerosene below cost during the first half of the current fiscal, a ministry official said.
Petrol price on Saturday breached the Rs 83 per litre-mark in Delhi for the first time in more than two years after a rally in international oil prices forced a 13th increase in rates in the last fortnight. Petrol price on Saturday was raised by 27 paise per litre and diesel by 25 paise, according to a price notification of oil marketing companies. Petrol price in Delhi rose to Rs 83.13 per litre from Rs 82.86. Diesel rates went up from Rs 73.07 to Rs 73.32 per litre.
State fuel retailers IOC, Bharat Petroleum and Hindustan Petroleum sell diesel, domestic LPG and kerosene at government dictated rates which are lower than cost of production.
State-owned oil firms on Tuesday cut jet fuel, or ATF, prices by 4 per cent, the first reduction in rates since July, on softening of international oil prices.
Over 100 chemical storage tanks built at the Pirpav jetty near Chembur have been operating without approvals from the ministry of environment and forests for over 18 years. Each of these tanks has an average capacity of 200,000 kilolitres of oil.
The basket of crude oil India buys from overseas markets averaged $68.07 per barrel in September as against the August average of $71.98 a barrel.
The Union oil ministry is considering a proposal to adopt differential pricing for diesel, under which industrial users like power utilities, will be charged market prices and retail consumers continue to be subsidised.
The public sector oil companies -- Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum -- may suffer a Rs 25,000 crore revenue loss on fuel sales this fiscal, said S Behuria, chairman and managing director, IOC.IOC, BPCL and HPCL incurred a revenue loss of Rs 1.03 lakh crore on sale of petroleum fuel in 2008-09. The global rise in crude oil prices will increase the under-recoveries for PSUs on sale of fuel at controlled prices.
This is the second straight increase in ATF price this month. Rates were hiked by a record 56.5 per cent (Rs 12,126.75 per kl) on June 1. Simultaneously, petrol and diesel prices were hiked for the 10th day in a row.
The first cargo of 25,000 tonnes of Euro-IV grade diesel from RIL's refinery at Jamnagar was shipped by Hindustan Petroleum Corporation Ltd on Friday, said an informed source. This is also the first coastal supply of Euro-IV diesel for the Indian market.
The Finance Ministry will give Rs 12,000 crore in cash to Indian Oil, Hindustan Petroleum and Bharat Petroleum to cover for less than half of the losses they incurred on selling LPG and kerosene this fiscal.
State-run oil marketing companies Indian Oil, Hindustan Petroleum and Bharat Petroleum are likely to lose Rs 45,478 crore (Rs 454.78 billion) this fiscal on selling fuel below cost, Petroleum Minister Murli Deora said.
Revenue from divestment has fetched Rs 40,000-50,000 crore against target of Rs 2.10 trillion.
The bonds, which will come over and above Rs 61,800 crore (Rs 618 billion) already issued to the three companies, would help them bridge the revenue loss they incurred on sale of petrol, diesel, liquid petroleum gas and kerosene in 2008-09, a petroleum ministry official said.
In a step towards dual pricing of domestic cooking gas, the government has decided to allow oil-marketing companies to sell the fuel at market prices in distinct fibreglass cylinders. IOC, BPCL and HPCL will sell these cylinders in Bangalore, Mumbai and Pune, which have been identified as test beds for the pilot project. The companies could revise fuel prices for transparent cylinders as LPG for them will not be subsidised. Feasibility of this project is yet to be adjudged.
State-owned Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum are collectively losing Rs 2.65 billion (Rs 265 crore) per day on selling fuel below cost and may end the fiscal with a Rs 874.4 billion (Rs 87,440 crore) revenue loss.
The ministry of petroleum has approached the finance ministry to seek permission to give additional bonds worth Rs 10,000 crore to the three public sector oil marketing companies --Indian Oil Corporation, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd--to help them close the last fiscal with a profit.
Jet fuel will cost Rs 37,300 per kl in Mumbai, home to the nation's busiest airport, from Rs 38,246.60. The reduced rates will help cash-strapped airlines cut fuel cost, which constitutes roughly 40 per cent of their operational cost.
IOC, BPCL and HPCL currently sell petrol at a loss of Rs 6.12 per litre, Rs 4.60 a litre on diesel, Rs 18.42 per litre on PDS kerosene and Rs 265.27 per 14.2-kg LPG cylinder.
Besides IOC, Royal Dutch Shell is believed to have evinced interest in reviving the petrol pumps, industry sources said. Reliance, as part of a two part bid process, had sought expression of interest from IOC, Shell, Bharat Petroleum and Hindustan Petroleum by Friday for a possible partnership for reopening the petrol pumps.
The global economic downturn has seen the reversal of fortunes for refiners with margins coming under severe pressure as fuel demand dropped in major markets in the US, Europe and South East Asia.
The country's biggest fuel retailer Indian Oil Corporation on Wednesday said it is losing Rs 107 crore (Rs 1.07 billion) a day on selling auto and cooking fuel below cost even as it awaits the government to announce clear compensation package.
Indian Oil Corporation on Tuesday said it may lose over Rs 25,000 crore (Rs 250 billion) in revenues this fiscal on selling fuel below imported cost.
Full-service carrier Kingfisher Airlines has sought permission from the petroleum ministry to extend the date for paying dues to public sector oil companies for aviation turbine fuel.
The government's decision to raise fuel prices in June has scuttled the oil companies' plans to reduce their losses from retail fuel sales as consumers are buying less of premium fuels, which is more expensive than normal fuels.
After a year of sluggish growth in fuel retail outlets, the three state-run oil-marketing companies--Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation--have chalked out aggressive plans for expansion in the next financial year. They will be commissioning over 2,100 outlets in 2009-10--over three times what they added in the current year--at an investment of about Rs 1,200 crore.
Minister of state for petroleum and natural gas Jitin Prasada in a written reply to a question in the Lok Sabha said that IOC and MRPL have been allocated 0.20 million tonnes each in 2009-10, while HPCL would offtake 0.30 million tonnes of Rajasthan crude. In 2010-11, IOC would buy 1.5 million tonnes of the crude oil from the nation's most prolific oil discovery in more than two decades, while MRPL would double its offtake to 0.40 million tonnes.
It is looking to invest over Rs 20,000 crore (Rs 200 billion) for a greenfield project in Raigad or Ratnagiri districts of Maharashtra.
After two months of price cuts, the state-run oil companies on Friday hiked aviation turbine fuel (ATF) price by a steep 6.5 per cent in step with hardening international rates.
The three firms had planned to jointly buy or lease plantations and related units for producing ethanol, a by-product of sugarcane that is doped in petrol to reduce dependence on imported oil. The three firms have suffered a Rs 14,700-crore (Rs 147 billion) net loss in the first-half of the current fiscal and were living on borrowed money as they lost heavily on retail fuel sales domestically.
The government has directed state-run fuel retailers Indian Oil, Bharat Petroleum and Hindustan Petroleum to clear the wait list for domestic LPG connection within the next two months.
Many of the 37,000 petrol pumps across the country could go dry by Thursday if the indefinite strike by executives from public sector oil companies continues. Over 55,000 oil PSU officers from 14 oil companies -- under the umbrella of the Oil Sector Officers Association (OSOA) -- began their indefinite strike on Wednesday demanding higher wages.
Defying high court orders, oil PSU executives on Wednesday stopped work forcing stoppage of natural gas supplies to industries on the nation's main trunk pipeline but aviation services and fuel supplies continued to be normal.
The government has issued 6.35 per cent Oil Marketing Companies Government of India Special Bonds, 2024 for Rs 22,000 crore (Rs 220 billion) to three oil marketing companies.
For the second time this month, state-run oil companies on Tuesday cut jet fuel prices to ease the burden on cash-strapped airlines. Aviation turbine fuel (ATF) prices in Delhi was reduced by Rs 649 or 1.6 per cent to Rs 39,319 per kilolitre, effective midnight tonight.
Minister of state for petroleum and natural gas Jitin Prasada in a written reply to a question in the Lok Sabha said the finance ministry is yet to approve the oil bonds. Indian Oil, Bharat Petroleum and Hindustan Petroleum lost Rs 11,853 crore (Rs 118.53 billion) in revenues on not being allowed to raise LPG and kerosene prices in line with the cost during April- September.
"You will have to wait for that," Petroleum Minister Murli Deora told reporters. International crude oil prices are ruling at $74 per barrel on Tuesday.
After three consecutive hikes, state-run oil companies on Thursday reduced jet fuel or ATF prices marginally by about one per cent in tandem with international rates for the same.Indian Oil, Bharat Petroleum and Hindustan Petroleum cut aviation turbine fuel (ATF) price by Rs 311 per kilolitre in Delhi to Rs 31,615 per kl with effect from midnight tonight, an IOC official said.
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