IndianOil ultimatum to raise petrol prices
New Delhi   18-Apr-2012

State-run fuel retailers have threatened to raise gasoline prices sharply if the government does not compensate them for revenue losses on retail sales, IndianOil said on Tuesday in a statement.

It said the government should 'temporarily' consider gasoline as a regulated commodity on a par with other subsidised fuels -- diesel, cooking gas and kerosene -- and provide cash compensation for retail sales or reduce factory gate tax on the fuel to the extent of revenue losses.

IndianOil said state-run refiners cannot sustain the current scenario where they import crude oil at $121.29 per barrel and sell at $109.03 per barrel.

"Continuation of such pricing will only impede the ability of the Company to import crude oil and may affect product supply-demand balance," IndianOil said in the statement. It added the alternative was to "increase the price of petrol by Rs 8.04 per litre (excluding State levies) with immediate effect." The companies previously raised gasoline prices on December 1.

The Company's inability to effect the price increases during the period Dec.16, 2011 to Mar. 31, 2012 has resulted into total under recoveries of Rs.1036 crore (for all OMCs about Rs2287 cr). The under-recoveries sufferred by IndianOil during the year 2011-12 due to its inability to pass the increase to consumers, has resulted in total under-recoveries of Rs2236 crore (Rs4859 cr for all (OMCs).

IndianOil said that since the last revision, the international prices of these products have shown a sharp increase. The under-recovery on HSD has gone up from Rs6.13/litre to Rs14. 29/litre.