State-owned fuel retailers are losing close to Rs 3 per litre on selling diesel while the profit on petrol has trimmed due to recent firming up in international oil prices, industry officials said detailing reasons for continuing to hold retail prices. Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), who control roughly 90 per cent of India's fuel market, 'voluntarily' have not changed petrol, diesel and cooking gas (LPG) prices for almost two years now, resulting in losses when input cost was higher and profits when raw material prices were lower.
The government has decided to go ahead with the privatisation of Hindustan Copper Ltd, setting aside concerns over the fate of units, which were partially nationalised.
According to data compiled by BS Research Bureau for BSE 100 companies, seven public sector companies -- Indian Oil Corporation (IOCL), Bank of India, Union Bank, Bharat Petroleum (BPCL), Oil and Natural Gas Corporation (ONGC), Hindustan Petroleum (HPCL) and GAIL -- have reduced their employee costs ranging from one per cent to 21 per cent.
Sources said a meeting of heads of the oil marketing companies -- Indian Oil, Bharat Petroleum and Hindustan Petroleum -- was called off.
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.
With the government putting off an increase in diesel prices, Petroleum Minister Murli Deora sought an increase in government subsidy to bail out the three oil marketing companies (OMCs). Deora met finance minister Pranab Mukherjee in Mumbai to seek an immediate release of `10,000 crore as interim subsidy to Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation.
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 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.
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.
With the new Bharat Stage IV emission norms coming into effect from Thursday, oil companies are gearing up to meet the requirements of Mumbai, an official said on Friday.
In a marginal relief to consumers, IndianOil, the biggest oil marketing company, has cut petrol prices by Rs 0.56 per litre with effect from midnight today.
HPCL holds 50 per cent in Prize Petroleum while ICICI Bank has 35 per cent, ICICI Ventures 10 per cent and HDFC Bank 5 per cent.
The average price of Indian basket of crude oil during 2007-08 (upto August) has increased to $68.34 per barrel as compared to 62.46 dollars a barrel during 2006-07.
Capital expenditure by 54 large central public sector enterprises and five departmental arms, having a capex minimum target of Rs 100 crore, rose 93 per cent year-on-year (YoY) in the April-May period to Rs 1.39 trillion. The National Highways Authority of India (NHAI) and the Railways have started this financial year's capex cycle on a stronger note. In the first two months of FY24, the 54 CPSEs, along with the departmental arms, achieved 19 per cent of their combined budget target of Rs 7.33 trillion, Business Standard has learnt.
"Air India is unable to pay even after a 90-day credit period. They owe us about Rs 300 crore without interest. There is also no bank guarantee from Air India to any of the oil marketing companies. We do not know when will the company honour its dues," said a BPCL official on condition of anonymity.
Oil marketing companies IndianOil, Bharat Petroleum and Hindustan Petroleum together blocked nearly 2.9 million LPG connections belonging to customers having more than one connection across states.
These firms are expected to incur an under-recovery of over Rs 121,000 crore (Rs 1,210 billion) during this financial year, compared to Rs 78,000 crore (Rs 780 billion) in 2010-11.
A higher government borrowing will 'crowd-out' the private borrowing and push interest rates higher.
Public sector oil marketing company Indian Oil Corporation (IOC) will raise prices of petrol by 27 paise a litre, - for the first time since decontrolling petrol prices.
Even as automobile manufacturers are considering increasing the prices of their products, an increase in auto fuel prices is also imminent.
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.
Petrol and diesel prices are unlikely to be increased despite firming raw material costs because of upcoming general elections next year, Moody's Investors Service said. Three state-owned fuel retailers -- Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) -- which control roughly 90 per cent of the market, have kept petrol and diesel prices on freeze for a record 18 months in a row. This is despite the raw material (crude oil) cost surging last year, leading to heavy losses in first half of 2022-23 fiscal year before easing oil prices propelled them to profitability.
The government on Wednesday said there was no proposal to either merge Hindustan Petroleum and Bharat Petroleum with Oil and Natural Gas Corp or Oil India Ltd with Indian Oil Corporation.
With the government preparing to restrict the number of subsidised cooking cylinders, oil marketing companies have launched a 'transparency' portal that allows customers to keep an eye on the number of cylinders sold in their account by the dealer.
It is in talks with a local player for a discovered asset so that it can have a ready cash flow in one or two years.
The three oil PSUs have told Air India that if it did not make the monthly lump sum payment, they will stop fuel supply from October 11 at six major domestic airports.
With an eye on bigger imports, the oil marketing firm may get its French partner Total to set it up.
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.
The fuel price revision on Wednesday is likely to wipe out the Rs 1,100 crore net revenue earned by the three oil marketing companies--Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation -- in the last one month, say officials from these companies.
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.
The government will provide private companies subsidy equivalent to that given to state retailing firms on LPG, petroleum secretary B K Chaturvedi said.
Indian Oil, Bharat Petroleum, Hindustan Petroleum to open over 3,000 outlets this year. Even losses of over Rs 300 crore (Rs 3 billion) per day from selling automobile fuels have not stopped government-owned oil marketing companies from expanding their retail network across the country.
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.
The slowdown in corporate revenue growth over the last one year has begun to reflect in India Inc's capital expenditure, or capex. The country's top listed companies are going slow on fresh investment in capacity expansion, in line with a deceleration in their top line growth. The combined fixed assets of the listed companies, excluding banking, finance services and insurance (BFSI) and the government-owned oil & gas firms, were up 10.1 per cent year-on-year (Y-o-Y) during April-September 2023 (H1FY24) - the slowest in 18 months - as against 21.1 per cent Y-o-Y growth in H2FY23 (October 2022-March 2023) and 11.6 per cent growth in the April-September 2022 period (H1FY23).
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