Indian Oil Corporation Ltd (IOC) has announced plans to raise petrol prices by an additional Rs1.35 per litre with effect from 1 June.
Reports quoting IOC sources said the current hike, coming close on the larger Rs5 per litre hike on 15 May, is intended to bridge the shortfall in the previous hike, which, according to IOC, was not enough to cover the price of crude oil and the cost of refining it.
IOC had, on 15 May, raised petrol prices by up to Rs5.29 per litre, against, what it said, “a desired price of Rs10.50 per litre in petrol.”
IOC said the current increase in petrol prices is only moderate considering the very high prices of crude oil and the huge debt burden of oil companies, as it has to keep the consumers’ interest also into consideration.
Reports quoting IOC sources said the management was considering a hike in petrol prices, but was not in a hurry as the consumers have already been burdened by the recent hike.
IOC said it continued to make a loss of Rs4.50 per every litre of petrol it sold even after the Rs5 per litre hike in prices a fortnight ago. IOC estimates a loss of Rs1,048 crore as a result of selling fuel below cost.
“We are continuing to incur losses by selling petrol below cost prices. We are constantly monitoring the global crude oil price. We will take the decision at an appropriate time,” IOC chairman R S Butoal said.
IOC, he said, is waiting for the right time for a moderate price rise.
Reports, meanwhile, also pointed to the possibility of a simultaneous increase in the prices of diesel LPG as well as petrol this time around.
Diesel prices are expected to up by Rs4 and LPG prices by Rs25 per cylinder.
IOC, however, reported gross turnover (inclusive of excise duty) of Rs3,28,744.27 crore for the year 2010-11 – which is the highest ever. Profit after tax stood at Rs7,445.48 crore for the year. Profit for the fourth quarter stood at Rs3,095.16 crore, an increase of 138.9 per cent from the third quarter figure of Rs1,634.76 crore.
On an year-on-year basis, however, IOC registered a 29.7 per cent decline in net profit at Rs3,905.2 crore for the fourth quarter ended March against Rs5,556.8 crore a year ago.
Butola attributed this to high under-recoveries on domestic sales of diesel, cooking gas and kerosene.