Petroleum Firms Claim Loss Despite Price Rise, Say Rs 12 Additional Hike Needed To Offset It

New Delhi: State-run oil marketing companies likely to raise the petrol and diesel price further as they claim loses despite multiple recent price hikes in the fuel price. The companies claim that they are suffering loses and therefore may need to increase auto fuel prices up to Rs 12 per litre to be able to offset the losses being incurred on sale of the two fuels.

Despite consecutive four hikes in prices of petrol and diesel last month, the state-run oil marketing companies claim that they incurs a loss of Rs 5.5 per litre on petrol and Rs 4.5 per litre on diesel, as the widening West Asia conflict that has pushed international crude oil prices to above $100 per barrel.

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The oil marketing companies including Bharat Petroleum Corp, and Hindustan Petroleum Corp are incurring losses amounting to Rs 550 crore per day as they continue to procure crude oil at elevated rates while selling petrol and diesel at lower rates, according to reports.

Senior Vice President and Co-Group Head at ICRA, Prashant Vasisht said that the  OMCs marketing margins on sale of petrol is -Rs 5.5 per litre and -Rs 4.5 per litre on diesel currently. “Over and above that, they are also incurring heavy losses on sale of LPG. Even if OMCs raise petrol prices by overall Rs 12 per litre (including earlier hikes), they might be able to reach break-even in sales of auto fuels,” he noted.

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