The Hindu : Front Page : Let consumers share burden: IOC

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Wednesday, Oct 31, 2007
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Let consumers share burden: IOC

Sujay Mehdudia

“Rising crude prices and under-recoveries cause for concern”

Spiralling global rates putting “huge burden” on IOC
Without price hike, its loss will go up from Rs. 96 crore to 121 crore

NEW DELHI: Stating that the rising crude prices and growing under-recoveries were a matter of concern, the Indian Oil Corporation on Tuesday sought an across-the- board increase in the prices of petrol, diesel, domestic LPG and kerosene.

It said the spiralling global oil prices were putting a “huge burden” on the company and could result in a revenue loss of over Rs. 8,500 crore this fiscal.

Stating that the government had taken a decision to share the burden of rising international prices equally among oil companies, the government and consumers, IOC chairman Sarathak Behuria wanted a mechanism put in place — for consumers to bear one-third of the burden.

While the government and the oil companies were bearing their share of the burden, the consumers had been spared any hike in fuel prices despite crude touching a historic high of $93 a barrel. “The Indian basket of crude is at an all-time high of $85.87 a barrel. It is a matter of grave concern to us.”

Current loss

Mr. Behuria said the IOC was currently losing Rs. 96 crore on petrol, diesel, LPG and kerosene. It would rise to Rs. 121 crore from November 1 if a hike was not effected.

Public sector firms were losing Rs. 3.90 a litre on petrol, Rs. 6.22 on diesel, Rs. 15.99 on kerosene and Rs. 174.17 on every 14.2-kg LPG cylinder.

Mr. Behuria said the IOC posted a 32 per cent rise in the net profit in the second quarter ended September 30, as a stronger rupee reduced crude import cost and pared overseas loan repayments. The net profit rose to Rs. 3,817.75 crore in July-September from Rs. 2,883.59 crore a year ago. Net sales were marginally low at Rs. 49,410.98 crore compared to Rs. 49,995.17 crore in July-September 2006.

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