Private Oil Companies Loss On Petrol Diesel Due To Crude Oil Price Hike
Petrol-Diesel Price Update: There is a steady increase in the prices of crude oil, but the prices of fuel in the domestic market remain the same. In such a situation, companies like Jio-BP and Naira Energy, a private sector retailing company, are facing heavy losses.
huge loss to companies
These private sector companies are incurring a loss of Rs 20 to 25 per liter on the sale of diesel and Rs 14 to 18 per liter on petrol. These companies have written a letter to the Ministry of Petroleum and have demanded the government to take appropriate steps to solve this problem.
government company included
The Federation of Indian Petroleum Industry (FIPI), in a letter to the Petroleum Ministry on June 10, has said that the loss on the sale of petrol and diesel will limit investment in retail business. FIPI counts Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) as its members, apart from private sector companies.
Petrol and diesel prices are frozen
International prices of crude oil and its products have hit a decade high, but state-run fuel retailers have ‘freezed’ petrol and diesel prices. Government companies account for 90 per cent of the fuel retail business. At present, the fuel prices are only at two-thirds of the cost cost, which is causing loss to the private companies.
crisis on private companies
This has put Jio-BP, Rosneft-backed Naira Energy and Shell at risk of either raising prices or losing their customers.
Rates did not increase even between November and March
There was no increase in retail selling prices for petrol and diesel for a record 137 days between the beginning of November 2021 and March 21, 2022, despite an increase in crude oil prices. With effect from March 22, 2022, the retail selling price was increased by an average of 80 paise per liter per day on 14 occasions, leading to an increase of Rs 10 per liter in both petrol and diesel prices.
Loss of Rs 20-25 per liter on diesel
FIPI Director General Gurmeet Singh has written in the letter that the sale of fuel at below cost (under-recovery) to private companies is causing a loss of Rs 20-25 per liter on diesel and Rs 14-18 per liter on petrol. .
Increasing loss of companies
Retail fuel prices have not increased since April 6. At the same time, the price of fuel sold to bulk buyers like state transport undertakings has increased in line with international prices. FIPI said that due to this a large number of wholesale buyers are buying from retail outlets, due to which the loss of private sector companies is increasing.
Know what is written in the letter?
In the letter, an appeal has been made to the government to intervene in this matter. FIPI said that all the petroleum marketing companies in the private sector are investing heavily in the retail sector, but at the moment they are facing a difficult situation. It has been said in the letter that this is affecting the ability of private companies to invest as well as operate. Also they are not able to expand their network.