Oil marketing companies continue to lose Rs 600 crore a day even after price hike: Govt

Even after the price hike on petrol and diesel, the state-run oil marketing companies (OMCs) continue to lose around Rs 600 crore a day.

Sujata Sharma, Joint Secretary, Ministry of Petroleum said, “If you look at the global level, the price increase is in the range of 22 per cent for motor spirit (MS) and 27 per cent for high-speed diesel (HSD).”

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“But in India, the hike is much less. For MS, it is 7.7 percent and 8.6 percent for HSD. But before increasing the prices, the government undertook all possible measures. The government has reduced excise duty on petrol and diesel by Rs 10 per litre, resulting in a revenue impact of Rs 14,000 crore,” Sharma said.

“Even after taking all these steps, OMCs were making losses of Rs 1,000 crore a day. After the price rise, it has reduced but it is still slightly less than Rs 600 crore per day,” she added.

Union Finance Minister Nirmala Sitharaman said on the recent fuel price hike that prices could have been Rs 10 costlier months ago, but the government shielded the prices for a 76-day period during the ongoing war.

“From the government’s side, for about 76 days, our objective has been to ensure that no additional burden is placed upon the people. We have provided relief amounting to more than Rs 1 lakh crore annually this year through reductions in excise duty,” she said.

India has recorded a fourth consecutive hike in petrol and diesel prices in less than two weeks, with prices rising by nearly Rs 7.5 per litre.

Sitharaman said India must keep a close watch on the “three Fs”—fuel, fertiliser and forex—amid the Iran war crisis which is impacting global markets and pushing up domestic costs.