Hardeep Singh Puri, the union minister for petroleum and natural gas, has said that the ministry will push for fiscal support to oil marketing companies (OMCs) for the losses incurred by them as they sold petrol and diesel lower than the cost.
Puri’s statement comes at a time when the petrol, diesel prices have remained unchanged for around 165 days. Meanwhile, the crude oil prices in the international market have been highly volatile and elevated during the period.
Petroleum ministry to push for support to OMCs
On asking whether the ministry would make efforts to provide relief to OMCs, the minister said: “The answer is an emphatic yes.” Noting that the losses and under-recoveries impact the finances and credit ratings of OMCs, the minister added: “Government is seized of the issue.”
Further, the minister said that although retail fuel prices are now deregulated, the public sector OMCs have the “nation’s interest at heart”.
“A good corporate entity will realize that if I keep my consumer base going, he will also make money. He will make only something else,” he added.
The minister compared the price movement of fuels globally with that in India, saying: “When petrol prices went up 43-46% in North America, ours went up only 2%.”
IOC net loss
Last week, state-owned Indian Oil Corporation (IOCL) reported a net loss of Rs 272.35 crore for July-September. It was the second straight quarter of loss on account of selling petrol, diesel and cooking gas LPG at rates below cost. The net loss of Rs 272.35 crore compared to a profit of Rs 6,360.05 crore in July-September 2021, as per a company’s filing with the stock exchanges.
Moody’s report
A report by Moody’s Investors Services last month revealed that the OMCs have incurred an estimated loss of $6.5 billion-$7 billion on petrol and diesel sales due to a freeze on retail fuel prices between November 2021 and August 2022.
As per Moody’s estimates, IOCL’s revenue loss on petrol and diesel sales is $3.0 billion-$3.2 billion, while BPCL and HPCL’s is estimated at $1.6 billion-$1.9 billion.
One-time payment to OMCs
The Union Cabinet last month approved a one-time payment of Rs 22,000 crore to OMCs as a compensation for their losses in selling cooking gas below cost. The compensation will be distributed among Indian Oil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL).
Petrol and diesel prices today across major cities in India
| S.No. | City | Petrol price per Litre (In Rs.) | Diesel Price per Litre (In Rs.) |
| 1. | Delhi | 96.72 | 89.62 |
| 2. | Mumbai | 106.31 | 94.27 |
| 3. | Chennai | 102.63 | 94.33 |
| 4. | Kolkata | 106.03 | 92.76 |
| 5. | Lucknow | 96.33 | 89.53 |
| 6. | Hyderabad | 109.66 | 97.82 |
| 7. | Bengaluru | 101.94 | 87.89 |
| 8. | Jaipur | 108.67 | 93.89 |
| 9. | Ahmedabad | 96.49 | 92.23 |
| 10. | Patna | 107.24 | 94.04 |
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