IOC chairman says petrol prices will be cut if international rates fall
Mumbai   17-Sep-2011

State-owned IndianOil (IOC) will use the first available opportunity to cut petrol rates if international crude rates dip, the firm’s chairman RS Butola said after widespread criticism of the Rs. 3.14-per-litre increase in the fuel’s pump price. Petrol prices were raised for the twelfth time on Friday because international gasoline prices had risen and the rupee had depreciated.

International crude oil prices have risen in recent weeks because of factors such as the volatile situation in Libya. The average price of the Indian basket of crude oil has risen to $110.68 this month from an average of $107.24 in the past two weeks. “We are very eagerly waiting for an opportunity to reduce petrol prices. I hope that global crude prices will decline after global supply situation improves,” Mr Butola told ET.

He said besides some disruption in crude output from the North Sea, the crisis in Libya had disrupted daily supply of at least 1 million barrels of sweet crude and oil producing nations such as Saudi Arabia are trying to augment their production to meet the shortfall. State oil firms have faced criticism that they have never reduced petrol prices since January 2009 although crude oil rates have fluctuated, but the chairman of India’s biggest oil marketing company said state-owned oil firms always acted in a “responsible manner” while using their freedom to pare retail prices of petrol with market rates. Oil firms have revised petrol prices upwards 12 times since it was freed from the government’s control from June last year.

“In May we had raised petrol prices by only Rs. 5 a litre while as per market rates the increase should have been Rs. 10.5 a litre. IOC alone has incurred a revenue loss of Rs. 1,129 crore in the first quarter for keeping petrol prices below market rates to save consumers from any steep hike,” Butola said. He said that despite the Rs. 3.14 a litre hike, the company is incurring a revenue loss of 62 paiseper litre. “Even in the current quarter we have already lost revenues Rs. 8 crore on petrol,” he said.