The Hindu : Business : IOC suffers losses on sale of products

Online edition of India's National Newspaper
Tuesday, May 17, 2005

Business

Business

IOC suffers losses on sale of products

Special Correspondent

Revenue deficit from underpricing estimated at Rs. 2,600 crs.

NEW DELHI: Indian Oil Corporation has suffered losses of Rs. 2,600 crores on sales of petrol, diesel, LPG and kerosene till now in the current fiscal. This was disclosed here on Monday by the Chairman, Sarthak Behuria, who said the revenue deficit on petrol and diesel was estimated at Rs. 1,200 crores and on kerosene and LPG at Rs. 1,400 crores.

Mr. Behuria said the oil companies were urging the government to go in for some kind of a price hike to prevent the growing level of under-recoveries. It had been estimated that petrol price needed to be raised by Rs. 4.84 a litre and diesel by Rs. 4.52 a litre to absorb the impact of higher duties and higher prices of crude oil. Kerosene was being sold at a loss of Rs. 11.92 a litre while LPG was similarly under-priced by Rs. 106 a cylinder, he said.

The chairman told newspersons that the total under-recovery on petrol, diesel, LPG and kerosene for the oil industry in 2004-05 was Rs. 20,310 crores. He argued in favour of all oil companies in the public and private sector to share the under-recoveries on petrol, diesel, LPG and kerosene on an equitable basis. This would, he felt, enable the oil and gas sector to earn sufficient returns on investment. Besides, he suggested that the cess of Rs. 1,800 a tonne on domestic crude oil should be used to support the oil marketing companies while excise duty on petroleum products should be reduced.

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