Petroleum Minister Hardeep Puri has said that oil companies are looking towards under-recovery
New Delhi:
With no change in fuel prices for almost two months despite cost escalation, oil companies have started reporting under-recoveries or losses, which amount to Rs 17.1 per liter on petrol and Rs 20.4 on diesel .
Oil Minister Hardeep Singh Puri said fuel retailers have knocked on the doors of the government seeking “relief”, but added that pricing is their decision.
Refusing to comment on reports of private oil refiners importing Russian crude at steep discounts and killings on exports of refined petroleum products to the US, the minister said the finance ministry was apt to take a decision on imposing an unexpected tax. was the authority. Oil and gas producers are getting higher profits due to the jump in international energy prices.
“There is a sense of responsibility in all our corporate citizens,” he said at a press conference here. “These actions (revision of fuel prices) are done by companies.” He said oil companies do not come to him for consultation on revising fuel prices.
Local pump rates have been benchmarked at around $85 per barrel of crude oil while Brent is currently trading at $113. This has resulted in a difference between the cost and the selling price, which is called an under-recovery or loss. Till June 2, the industry was losing Rs 17.1 per liter on petrol and Rs 20.4 on diesel.
“They (oil companies) are talking about under-recoveries. They are talking about it. As I said, they are responsible corporate citizens and they will take whatever decision they take,” Mr. Puri said.
The minister said, “Yes they come to us, it is an open secret. They come to us and say we need relief here, we need relief there but ultimately it (the price) is their decision.” “
He did not elaborate on the relief sought by the oil companies.
Despite the jump in oil prices, state-owned Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) for the first time set petrol and diesel rates at a record 137 per cent in early November 2021. Freeze for days, when elections were held in five states including Uttar Pradesh and then again in April in a hiatus that is now 57 days old.
The government had last month cut excise duty on petrol by Rs 8 per liter and on diesel by Rs 6. This shortfall was passed on to consumers and was not adjusted against under-recoveries or losses caused to oil companies on selling petrol and diesel.
While state-owned oil marketing companies (OMCs) have maintained retail operations despite losses, private sector retailers such as Reliance-BP and Nayara Energy have cut operations to cut losses.
The cut has faced criticism from some sections, who say that both the companies are exporting at a profit instead of selling in the domestic market.
While Reliance BP Mobility Limited – a joint venture of Reliance and UK’s BP – is a standalone fuel marketing company with 1,459 petrol pumps in the country, Reliance Industries Ltd owns twin oil refineries in Jamnagar, Gujarat, one of which is licensed received. For export only.
Rosneft-backed Naira Energy also has an oil refinery at Vadinar in Gujarat.
Asked to comment on reports of private sector refiners importing Russian crude oil available at huge discounts and then exporting finished products to the US and other countries, Puri said it is very difficult to say what crude oil is. left the country. Huge refinery for processing and from which crude oil is the product exported.
“Whether Russian crude is coming to a private refinery and going to the US (as a finished product), I will never be able to find. There is no possibility,” he said.
While it was a “valid question” for private refiners not to sell in the domestic market, he would not comment on the issue or advise them through the press, Mr. Puri said.
“My primary responsibility as the line minister is to ensure that petrol and diesel are made available,” he said.
“Many of our entities are both manufacturers, importers and exporters. This is something you must understand.”
Last week, on the issue of imposing unexpected tax like Britain, the minister said that this issue comes under the jurisdiction of the Finance Ministry.
“It is a finance ministry issue. But I think our current focus is to ensure that we get energy at safe and affordable prices. That is the main thing,” Mr. Puri said.
He said that there will be exports. “We import crude oil from one country, we export high speed diesel to that country. It’s a process that goes on. Everything else is speculative.”