Multinational companies like Shell, Caltex, Elf and SHV that have been attracted by the huge possibility to market Liquified Petroleum Gas in India are these days waiting for their chance.
The government allocated Rs 650 billion for petroleum subsidies in FY14, of which Rs 450 billion was used to pay oil marketing companies for the subsidy gap incurred in the previous financial year.
RIL, which had over 1,470 retail outlets, is said to be running only 350 of those at present.
India, which imports over 80 per cent of its oil needs, spent $87.7 billion on importing 220.43 million tonne (MT) of crude oil in 2017-18. For 2018-19, the imports are pegged at almost 227 MT.
"Deora's ability to be a good listener, and his understanding of business, as he is an industrialist himself, helped the empowered group of ministers reach a decision that more or less has satisfied all parties," a senior official says.
The government indecisiveness on petroleum price rise, coupled with late release of cash subsidy, has sent the borrowings of three government-controlled oil marketing companies to an all-time high of around Rs 118,000 crore (Rs 1,180 billion).
IOC, in the annual performance memorandum it signs with the petroleum ministry, stated that the Navratna oil companies should be granted freedom to fix retail selling price of petrol, diesel, domestic LPG and kerosene.
Petrol and diesel prices across the country will increase by 9-13 paise a litre with effect from Tuesday midnight, after the government decided to increase the commission to petrol pump dealers.
Petroleum Minister Jaipal Reddy said these measures would cost the government Rs 49,000 crore in the current financial year.
The Opposition alleged that without any provocation from the Opposition, "outsiders who were not part of Parliament security were brought in to manhandle the Opposition leaders and members, including women Parliamentarians who were only protesting against the Government's conduct, highhandedness and muzzling of the voice".
Oil prices have risen as freezing weather in the northern hemisphere has increased energy demand for heating.
The three govt-owned OMCs - IndianOil, BPCL and HPCL - together meet the country's entire LPG cylinder demand.
It's too early to assess their effect on real investment and output.
With the rising price of crude oil, the gap between the desired selling price and the actual selling price -- referred to as under-recovery -- is up to Rs 190 crore (Rs 1.9 billion) a day. The solution is to raise retail prices, an unpopular move.
Public sector oil companies are likely to incur a loss of Rs 50,000 crore (Rs 500 billion) in the current fiscal on selling fuel below cost, Indian Oil Corporation chairman Sarthak Behuria said on Tuesday.
Upstream oil firms bear one-third of the revenue that retailers lose on selling diesel, domestic LPG and Kerosene at government-controlled rates.
In a discussion in Lok Sabha on the COVID pandemic, members called for ban on international flights in view of the outbreak of the Omicron strain and demanded that the government 'accept responsibility' for deaths of lakhs of people during the outbreak.
Petrol prices may be cut by as much as Rs 1-1.50 per litre next week on falling international oil rates and appreciating rupee but a one-time hike in diesel and possibly LPG rates is still on the cards.
If the current trend continues, diesel will be deregulated in three months.
Under-recovery or revenue loss on diesel has risen to Rs 10.48 per litre from Rs 9.99 a litre in the first fortnight of December, an official statement said in New Delhi.
West Bengal Chief Minister Mamata Banerjee on Monday slammed Prime Minister Narendra Modi for 'spreading lies and canards' against the Trinamool Congress government, and said voters, this time, would witness 'Didi versus BJP' fight in all 294 constituencies of the poll-bound state.
Sharp reactions met the government's decision to enforce the single-steepest hike in fuel prices on Wednesday, and it came under attack from its allies as well as opposition parties.
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 pricing and marketing freedom for exploitation would be capped by a ceiling price.
West Bengal Chief Minister and Trinamool Congress chief Mamata Banerjee will on Monday lead a party demonstration at the Jantar Mantar in New Delhi to urge the Congress-led United Progressive Alliance government to withdraw its decisions relating to FDI in multi-brand retail, cap on subsidised LPG and diesel price hike.
Unfazed by the uproar over Foreign Direct Investment in retail and other tough decisions, Prime Minister Manmohan Singh on Saturday indicated that the government may continue with the reforms process and expressed willingness to discuss issues with allies.
"The UPA government showed its anti-people stance by increasing the prices of essential goods," said former AP chief minister Chandrababu Naidu.
A bandh called by the National Democratic Alliance, Left parties and the Samajwadi Party to protest against diesel price hike, Foreign Direct Investment in multi-brand retail and cap on subsidised LPG on Thursday evoked mixed response as protestors disrupted road and rail traffic in parts of Uttar Pradesh, Bihar, West Bengal and Odisha but it had little impact in Mumbai.
According to reports, the Congress Core Group meet that lasted for almost two hours at the Prime Minister's 7, RCR residence saw the top party leaders deliberating over the political situation arising out of the Trinamool Congress's decision to withdraw support to UPA government.
Ahead of the crucial meeting of Trinamool Congress parliamentary party, prominent leader Saugata Roy indicated that party could pull out its ministers from the Union council of minister if its roll back demands on FDI in retail, cap on LPG subsidy and diesel price hike were not met with.
A day before the crucial meeting of the Trinamool Congress parliamentary party on Tuesday which is scheduled to take a call on the hiked diesel price, cap on subsidized LPG and FDI in multi-brand retail, party chief Mamata Banerjee on Monday hit out at a section of the media for disseminating "distorted and concocted information".
Congress President Sonia Gandhi held consultations with party leaders as the 72-hour deadline set by Trinamool Congress for rollback of diesel price hike, LPG subsidy cap and FDI in retail ended on Monday amid indications a worst case situation could be a pull out of union ministers by the key ally.
With the 72-hour deadline to the Centre to rollback diesel price hike, LPG subsidy cap and FDI in multi-brand retail expiring on Monday, the Trinamool Congress mounted fresh pressure with a Union minister belonging to it listing three options, including withdrawal of support to the United Progressive Alliance.
The Left parties on Sunday announced a 12-hour all-India general strike on September 20 to protest against government's decision on diesel price, LPG cylinders and FDI in multi-brand retail, coinciding with the agitation by other opposition parties and United Progressive Alliance supporter Samajwadi Party.
The relentless rise in international oil prices that last week touched an all time high of $135 a barrel has forced the government to mull options to save state-run firms, which expect a revenue loss of Rs 200,000 crore (Rs 2000 billion) this fiscal on sale of petrol, diesel, domestic LPG and kerosene.
The government has received three preliminary bids for buying of controlling stake in India's second-largest fuel retailer Bharat Petroleum Corporation Ltd (BPCL), Oil Minister Dharmendra Pradhan said on Wednesday. Mining-to-oil conglomerate Vedanta had on November 18 confirmed putting in an expression of interest (EoI) for buying the government's 52.98 per cent stake in BPCL. The other two bidders are said to be global funds, one of them being Apollo Global Management.
Estimated to cost $44 billion, the project was expected to be commissioned by 2025.
In the sixth such hike in three months, petrol price has been increased by a steep Rs 2.35 per litre and diesel by 50 paise per litre on falling rupee and firming international oil prices.
India's fuel demand in May slumped to its lowest in nine months as restrictions to curb the second wave of COVID infections stalled mobility and muted economic activity. Fuel demand fell 1.5 per cent to 15.1 million tonnes despite the low base of May 2020 and was down 11.3 per cent when compared to the previous month, according to data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry. India was under one of the world's strictest lockdowns in May last year, which brought all mobility and economic activity to a grinding halt.
Diesel prices are raised every month by up to 50 paise per litre to trim the losses. Rates were last raised on August 1 after which losses had dipped to Rs 1.33.
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