The Hindu : Business : `Oil PSUs losing $51 m a day'

Online edition of India's National Newspaper
Thursday, May 18, 2006

Business

Business

`Oil PSUs losing $51 m a day'

Special Correspondent

Natural gas emerging as a preferred fuel

NEW DELHI: The public sector oil marketing companies (OMCs) are losing about $ 51 million each day on the retail sale of fuel below cost, the Petroleum Secretary, M.S. Srinivasan, said here on Wednesday.

Addressing the Indo-U.S. conference on `Building natural gas markets in India,' Mr. Srinivasan said: "The daily loss to oil marketing companies is $51 million. This came down today as a result of a fall in crude prices to $50.91 million.''

In case domestic fuel prices are not revised in line with the trend in international markets, the four OMCs — Indian Oil, Hindustan Petroleum, Bharat Petroleum and IBP — will end up losing about Rs. 73,512 crore in revenues this fiscal.

Currently, the losses incurred on selling petrol stands at Rs. 9.33 a litre, diesel Rs. 10.43 a litre, kerosene Rs. 17.16 a litre and domestic LPG at Rs. 114.45 a cylinder.

Mr. Srinivasan said the days of cheap crude were over. Without elaborating further, he said: "Oil companies have to go in search of crude further, wider and deeper and it does not come cheap.''

He said the Petroleum and Natural Gas Regulatory Board under the recently enacted law would be in place shortly. The board would promote competition in the oil and gas sector and particularly help in the growth of natural gas which is emerging as a preferred fuel.

In line with the global trend, Mr. Srinivasan said the share of natural gas in the country's energy mix was slated to increase from the current 9-10 per cent to about 25 per cent over the next 25 years.

Initiatives were being taken to have a nationwide gas grid and trans-border trade in natural gas through pipelines and in the form of liquefied natural gas (LNG).

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