IOC wants govt to compensate OMCs by way of cash
New Delhi   24-May-2011

IndianOil (IOC) feels oil marketing companies should be fully compensated by way of cash for under-recoveries.

Denying that they were able to benefit from the recent rise in fuel prices, IOC Chairman RS Butola said only a "full compensation with cash support" would yield suitable results.

"Whatever decision the government takes on price, we should be fully compensated by way of cash support," he said, while speaking to reporters after inaugurating an augmented lube oil storage facility at Tondiarpet near Chennai.

He said IOC accounted for almost half of the industry's fourth-quarter under-recoveries of Rs. 6,900 crore. The industry's total subsidy burden for 2011-12 is estimated at around Rs. 78,000 crore. Of this, IOC will account for Rs. 43,100 crore.

Meanwhile, IOC said it would invest Rs. 13,000-14,000 crore this financial year. It is scouting a partner for its Rs. 10,000-crore LNG Terminal project near Chennai. He said the feasibility report of the project would be ready in six months.

IOC is automating its fuel stations. "We have taken up a programme on automation of all the retail petrol stations. Initially, we will cover 4,500 petrol stations, which retail about 200 kilolitres (kl) of fuels every month," Butola said.

In the first phase, about 1,600 petrol stations had been identified and were in the process of automation, he said. IOC would move to petrol pumps that retail about 100 kl every month in the next phase.