Indian Oil seeks autonomy to fix retail fuel prices
New Delhi   26-Sep-2009
IndianOil, the nation's largest oil company, has asked the government for freedom to fix retail fuel prices and snore autonomy in carrying out day to day affairs of the company. IndianOil, in the Annual performance memorandum it signs with the Petroleum Ministry, stated that the Navratna oil; companies should be granted freedom to fix retail selling price of petrol, diesel, domestic, LPG and kerosene. At present, the government does not allow oil companies to raise fuel prices to keep inflation under check. IndianOil , may see a revenue loss of Rs 23,510 crores on selling petrol, diesel, domestic LPG and kerosene, below cost in 2009-10. The oil company said pricing freedom was essential to "prevent erosion in resource base and generate a reasonable amount of surplus to assist in capital formation and to enable redeployment in futuristic projects for maintaining competitive advantage in the trade at a minimum cost of capital. The company currently loses Rs 3.63 on sale of every of petrol Rs 233 per liter on diesel, Rs 17.15 a liter on /kerosene and Rs 158.55 per 14.2-kg domestic LPG cylinder. IndianOil also sought autonomy to appoint chief executives and directors of subsidiary companies. "The government should have dealing only at the Board level of the holding company (in this case IndianOil) and hot with the subsidiary companies. The oil company also wanted freedom in appointment of independent directors, deciding on compensation t package, including perquisites and performance incentives of its employees, and board level appointees and designing and implementing VRS. IndianOil, according to the Memorandum of Understanding signed March 28, also wanted powers to reallocate/re-designate portfolios of full-time functional directors. The company, which has roughly 54 per cent of the market share, also wanted the government to delegate the power to sanction foreign tours of the Chairman and functional directors. In view of fast changing global scenario, commercial decision making process and IndianOil's vision to become a global energy major, the government may consider to empower the Chairman to approve the foreign tours of directors and the Navratna Board to approve foreign tours of the Chairman," it said. Meanwhile, Oil products consumption in August saw a 6.2 per cent growth against the same month last year. The growth was triggered by an increase in demand of mass consumed products such as LPG, petrol, and diesel, as well as bitumen and jet fuel. The Government data showed that domestic sales of oil products rose to 10.73 million tonnes (mt) from 10.106 mt in the same month last year. Diesel sales registered a growth of 15.1 per cent during the ' month. According to the Petroleum Planning and Analysis Cell (PPAC), diesel sales rose to 4.176 mt (3.628 mt).