State-owned gas retailers, together with Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL), have avoided adjusting petrol, diesel, and cooking gasoline (LPG) costs for nearly two years, leading to substantial losses when enter prices have been larger and profits when uncooked materials costs have been decrease. Despite calls to revert to day by day value revisions, they’ve held regular, citing excessive value volatility and the unfinished recouping of previous losses.
The current surge in worldwide oil costs has additional compounded their challenges. While costs softened late final 12 months, they firmed up once more in January, eroding revenue margins. Currently, the trade is experiencing losses of almost Rs 3 per litre on diesel, and the revenue margin on petrol has narrowed to round Rs 3-4 per litre.
“There are losses on diesel; it had turned positive, but now oil companies are losing close to Rs 3 per litre,” an trade official stated.
In response to inquiries about gas value revisions, Oil Minister Hardeep Singh Puri said that the federal government doesn’t dictate costs and that choices are made by the oil corporations primarily based on financial issues. He acknowledged the continued market volatility and indicated that value revisions might happen if the present pattern of profitability continues into the final quarter of the fiscal 12 months.
Despite the numerous profits of Rs 69,000 crore reported by the three state-owned firms within the first 9 months of the fiscal 12 months, considerations persist concerning the period of the value freeze and its impression on their monetary well being. The mixed internet revenue for IOC, BPCL, and HPCL throughout this era surpassed their annual earnings within the pre-oil disaster 12 months.
“They had losses when they voluntarily decided not to raise prices (despite oil prices going up),” Puri stated.
The choice to freeze gas costs dates again to April 6, 2022, amidst rising worldwide oil costs and considerations about inflation and financial restoration. Despite fluctuations in international oil markets, the freeze has remained in place, reflecting the challenges confronted by gas retailers in balancing shopper pursuits and monetary sustainability amidst unstable market situations.
(With PTI inputs)
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