The Hindu Business Line : IOC raises prices of branded fuel

Petro woes
IOC has raised the prices of its premium quality petrol by 20 paise per litre and diesel by 10 paise.
IOC, HPCL and Bharat Petroleum are together losing around Rs 220 crore per day on sale of petroleum products at subsidised rates.

Our Bureau

New Delhi, Jan. 4

Customers of branded fuel – XtraPremium petrol and XtraMile diesel – from the Indian Oil Corporation Ltd (IOC) stable will now have to pay slightly more. With effect from midnight of January 3, IOC has raised the prices of its premium quality petrol by 20 paise per litre and diesel by 10 paise, which are at a minimum level.

This in effect would mean the branded petrol in Delhi will now cost Rs 1.70 more than the normal petrol (Rs 43.52 per litre) and premium quality diesel would be dearer by 50 paise from the normal (Rs 30.48 per litre).

“This price revision is at the minimum level. However, depending upon market conditions there is scope for revision in prices both upward and downward,” sources said. Public sector oil marketing companies have the freedom to revise prices of premium auto fuel brands without Government permission. However, despite this hike, the prices still remain lower than the rates at which private sector players Reliance Industries Ltd and Essar sell there products.

“Besides, these prices are lower than the desired increase in the retail selling prices due to soaring crude prices,” sources said.

RIL sells petrol at about Rs 50 per litre and diesel is about Rs 38 a litre in Uttar Pradesh, while Essar sells at a rate which is about Rs 4 to Rs 5 per litre higher than State-owned companies. RIL had increased the retail selling price of petrol and diesel by Rs 2.50 per litre effective January 1. Both Essar and RIL only sell premium fuel.

Speaking to Business Line a senior IOC official said, the sale of branded fuels has changed with dynamics of the market changing. “People are now willing to pay higher price for quality products. With the launch of new generation cars and the changing scene in auto sector in India large number of customers are demanding branded fuel. Trend shows 25-30 per cent customers shifting to branded fuel from normal fuel,” he said.

For non-branded category, the Government is still controlling the prices. However, with the crude prices flirting with $100 a barrel mark, the Government is under pressure to consider a price revision to partially offset the revenue losses suffered by the oil companies.

The Indian crude basket on Thursday was at $94.62 a barrel, the highest till date. The oil marketing companies – Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation – are together losing around Rs 220 crore per day on sale of petroleum products at subsidised rates.

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