‘Oil cos losing Rs 1,000 crore a day’: Hike in prices imminent, hints Petroleum minister Hardeep Singh Puri | India News

New Delhi: Petroleum Minister Hardeep Singh Puri on Tuesday said that public sector oil marketing firms cannot sustain a daily loss of Rs 1,000 crore from selling petrol and diesel below market prices, a strong indication that pump prices are set to rise in the coming days.“They are taking losses to discourage the consumer. (But) at some stage the government will have to take a call,” Puri said at CII’s annual business summit, without commenting specifically on the much-anticipated price hike.He said, how long can the oil companies take it (losses)? Honestly, it worries me. The minister said oil retailers were under financial stress and were looking at a recovery of less than Rs 2 lakh crore and a loss of Rs 1 lakh crore in the April-June quarter, which could wipe out last year’s annual profit. The government can avoid taking “austerity measures” if the Strait of Hormuz reopens and the price of the crude basket drops to $70 per barrel.

Crude oil prices have risen nearly 50% since the war began on February 28, surpassing $100 a barrel. Rejecting suggestions that the price hike was deliberately postponed because of assembly elections in Tamil Nadu, Kerala and West Bengal, Puri said several elections have been held since 2022, when fuel rates were last hiked. “It’s not my concern that prices… won’t go up. I’m saying the two are unrelated,” he said, adding that India was the only country to freeze fuel prices for four years.Petrol and diesel prices in the capital are currently Rs 94.77 and Rs 87.67 per liter respectively. As per estimates, OMC- Indian Oil CorporationBharat Petroleum and Hindustan Petroleum – lost Rs 14 per liter petrol, Rs 42 per liter diesel and Rs 674 per domestic LPG cylinder. Their collective under-recovery is estimated at Rs 1,600-1,700 crore per day. Assuaging fears of shortages, Puri said there was no supply-related problem despite disruptions in energy flow and the country had 60 days of crude and LNG inventory and 45 days of LPG stocks. Acknowledging the need to increase reserves, he said a company is acquiring 400-500 acres of land for additional storage. On domestic oil and gas exploration, Puri said the government has revised exploration norms and expanded the acreage granted under the licensing round. The Center has also reduced effective royalty rates on crude oil and natural gas production to boost domestic exploration and output. According to the notification, the effective royalty on onshore crude oil production has been reduced to 10%, while the offshore crude royalty has been brought down to 8%. Natural gas royalty has also been reduced to 8 percent.