PUBLIC sector oil firms have requested the government to declare petrol as a regulated product like diesel and LPG so that they can claim compensation for the revenue they are losing on selling the fuel below market price.
Indian Oil, Bharat Petroleum and Hindustan Petroleum claim that they are losing ` 8.04 a litre on petrol sales and have requested the government to provide “ 100 per cent cash compensation” for the loss since they have not been allowed to increase prices.
The oil companies have suggested that as another option, the government can cut excise duty on petrol from ` 14.78 per litre by an amount equivalent to under- recoveries on fuel.
Simultaneously, the oil companies want the Central government to advise the states to reduce the rates of sales tax, which vary from 15 per cent to 33 pre cent. This works out ` 10.30 per litre to ` 18.74 per litre.
The three public sector oil companies claim they are losing ` 49 crore per day on petrol sales alone and another ` 573 crore daily on selling diesel, domestic LPG and kerosene below the market price.
IOC chairman R. S. Butola said that oil PSUs in the first 15 days of April lost ` 745 crore in revenue on petrol.
As a part of official policy, the pricing of petrol was freed from government control in June 2010 but in practice, the petroleum ministry still controls the price as it does not want an adverse political fallout.
With global crude prices hovering over $ 120 a barrel, the under- recovery on diesel has risen to ` 14.29 a litre and on kerosene to ` 31.03 per litre. The oil firms are also losing ` 570.50 on each LPG cylinder sold to households. The IOC chairman said this works out to an under- recovery of ` 305 crore per day for Indian Oil and ` 573 crore per day for the three oil companies collectively. The under- recoveries of the firm during the year 2012- 13 is estimated to be over ` 1,08,000 crore for Indian Oil.