The Hindu Business Line : Oil firms continue to press for price hike

`Petrol prices need to be raised by Rs 4.59 a litre (Rs 2.52 on account of increase in excise duty) and diesel prices need to be raised by Rs 4.97 per litre, including Rs 1.53 due to excise effect.'

New Delhi , May 10

PITCHING for sharing of under-recoveries on equitable basis by the oil firms, the IOC Chairman, Mr Sarthak Behuria, has said that the public sector oil retailing firms have lost over Rs 5,800 crore so far in the current fiscal due to non-revision of petrol, diesel, LPG and kerosene prices in line with the spurt in international oil prices and increase in duties.

"The oil marketing companies are unable to recover even the purchase price of products. The gross under-recovery on petrol, diesel, LPG and kerosene for 2004-05 and April 1-May 15 is Rs 20,310 crore and Rs 5,860 crore respectively," he said.

Speaking at a seminar organised by Petrofed on `Impact of rising oil prices and possible solutions', he said that the oil and gas sector was the highest contributor to the Central and State Exchequers.

The total Customs and excise duty of Rs 35,453 crore paid to the Central Government in 2001-02 increased to an estimated Rs 55,160 crore in 2004-05, while States' collection of sales tax had increased from Rs 24,884 crore in 2001-02 to an estimated Rs 37,001 crore in 2004-05.

Mr Behuria said that to ensure energy security, it was necessary for oil companies step up investments in exploration and production, set up new capacities for refining, and create massive supply chain infrastructure on a regular basis.

In his presentation at the seminar, a senior representative of Reliance Industries, Mr P. Raghavendran, said that the current international oil price rise was a long-term fundamental increase due to structural changes.

"The only viable option for India is to pass this price increase to the final consumer."

Petrol prices need to be raised by Rs 4.59 a litre (Rs 2.52 on account of increase in excise duty) and diesel prices need to be raised by Rs 4.97 per litre, including Rs 1.53 due to excise effect.

IOC to float Rs 500 crore bonds

To meet its working capital requirements, IOC will float Rs 500 crore of bonds by this month. Mr Behuria said that the non-revision of fuel prices had placed heavy burden on the company's finances. Hence, the need for increased borrowings.

IOC's total borrowings by June 1, 2005 would touch Rs 18,000 crore, up from Rs 10,000 crore till June 2004.

Sources said that the company would meet arrangers on Wednesday to finalise the details of the issue.

SBI Capitals, ICICI Securities, AK Capital, UTI Capital and Centram are the bankers of the proposed issue.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page