Oil cos losing Rs 1,000 crore a day: Puri hints pump price hike

At the CII's annual business summit in New Delhi, Petroleum Minister Hardeep Singh Puri warned that public sector oil marketing companies may not sustain daily losses of about Rs 1,000 crore from selling petrol and diesel below market price, implying a potential pump-price increase. He said the losses are meant to insulate consumers, but the government may need to decide on hard measures. He cited under-recoveries of Rs 2 lakh crore and losses of Rs 1 lakh crore for the April-June quarter, which could wipe out last year's profits. He added that the only way to avoid hard measures is if the Strait of Hormuz reopens and the crude basket price falls to $70 per barrel. He noted crude prices had surged nearly 50% since the war began on Feb 28, crossing $100 a barrel. He stated there are no supply issues despite disruptions in energy flows, with 60 days of crude/LNG inventories and 45 days of LPG stocks. He mentioned a company was acquiring 400-500 acres for additional storage. On exploration, the government has amended exploration rules, expanded licensing acreage, and reduced effective royalty on crude oil and natural gas production (onshore crude 10%, offshore crude 8%, natural gas 8%). He dismissed suggestions that price hikes were delayed due to elections in Tamil Nadu, Kerala, and West Bengal, insisting the two issues are unrelated and noting India has frozen fuel prices for four years. Petrol and diesel prices in Delhi were Rs 94.77 and Rs 87.67 per litre, respectively. IOC, BPCL, and HPCL were cited as incurring daily under-recoveries of about Rs 1,600-1,700 crore collectively.

The article notes that fuel rates were last increased in 2022, and that several elections have been held since then, providing background for current price-freeze policies.