Oil firms bleeding but Govt puts off price hike

DEORA DILLY-DALLIES: Petroleum Minister has several options to help firms but solution next week.

ibnlive.com is on mobile now. Read news, watch videos
be a Citizen Journalist. Log on to m.ibnlive.com NOW!

Related Stories

Top Headlines

Top Videos

Most Popular

• Pranab has promises to keep in Budget of hope 

• Budget and you: How policies impact your life | Secrecy Cordon around the Budget 

• 30 feared dead in explosion at firework factories in MP 

• Youth shot dead by cops had 26 injury marks 

• Varun fears threat to life; Maneka slams Govt 

• CNN-IBN debate: Homosexuality vs Indian morality 

• CPI-M Central Committee to act to curb Kerala infights 

• Kargil victory was certain: ex-army chief | Pay Tribute 

• British Islamic group plans coup in Pakistan: report 

• Scrap EVMs, let's go back to ballot, says Advani 

• Pranab has promises to keep in Budget of hope 

• Youth shot dead by cops had 26 injury marks 

• Kargil victory was certain: ex-army chief 

• Bollywood stars sizzle at the IIFA fiesta 

• IBNFocus: TDS process simplified 

• No minister contacted Madras HC judge: CJI 

• Scrap EVMs, let's go back to ballot, says Advani 

• CNN-IBN debate: Homosexuality vs Indian morality 

• Watch: Parties react to HC judgement on gays 

• Railways fail to provide basic facilities to passengers 

• Michael Jackson to be buried without his brain 

• Scrap EVMs, let's go back to ballot, says Advani 

• Shiney denies he had sex with domestic help 

• British spy chief's cover blown on Facebook 

• British Islamic group plans coup in Pakistan: report 

• Youth shot dead by cops had 26 injury marks 

• Kargil victory was certain: ex-army chief 

• Varun fears threat to life; Maneka slams Govt 

• Kambakkht Ishq is not vulgar or offensive: Akshay 

• No minister contacted Madras HC judge: CJI 

Photogallery

Find us on Facebook | Join IBNLive community

Stay ahead with G-Talk Buddy | Click now!

New Delhi: The Government will take a decision on whether to raise prices of petroleum products next week though global oil prices have are nearing $100, causing huge losses to public sector oil companies.

"We are trying to see if we can find a solution next week," Petroleum Minister Murli Deora said in Delhi on Wednesday. Deora had on November 2 said he would take a decision this week.

"The government is very much alive to the problems. We are trying our best to resolve this problem as early as possible," he said. "We are considering various alternatives, including duty restructuring and increase in prices".

Deora will meet Prime Minister Manmohan Singh on Wednesday when crude prices hit a lifetime high of $97 a barrel and may touch $100 per barrel.

Domestic oil companies are suffering huge losses due to high prices .The Indian crude basket, the price at which companies buy oil, has increased by 52 percent since February.

Sai Narsimha, Director, Finance at the Indian Oil Corporation, says the company sees its losses going up by Rs 3,000 crore if global crude price continues to rise . "Our under-recoveries are coming out to be Rs 122 cr per day. We have incurred huge losses,” said Narsimha.

At the current prices the total revenue loss of oil companies stands at Rs 54,935 crore and total losses at Rs 60,000 crore. The Government has three options to help the oil companies: the first is to hike prices of petrol and diesel.

A marginal hike could be on the cards but Gujarat elections and the Left could make the Government stay away from this politically sensitive decision.

The second option is to cut excise duties on petrol and diesel, but Finance Minister P Chidambaram is strongly against this.

The third option is to issue more oil bonds or transfer a part of the cost burden to companies like the Oil and Natural Gas Commission and Gas Authority of India Limited.