New Delhi, June 19 (Agency)
Due to the rise in crude oil prices, private sector companies such as Geo-BP and Naira Energy, which retail the fuel, have to pay Rs 20 to 25 per liter on the sale of diesel and Rs 14 to Rs 18 on petrol. Damage is happening. These companies have written to the Petroleum Ministry and urged the government to take steps to create a viable investment environment. The Federation of Indian Petroleum Industry (FIPI), in a letter to the Petroleum Ministry on June 10, has said that the loss on sale of petrol and diesel will limit investment in retail business. FIPI counts Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) as its members, apart from private sector companies. International prices of crude oil and its products have hit a decade high, but state-run fuel retailers have ‘freezed’ petrol and diesel prices. Government companies account for 90 per cent of the fuel retail business. At present, the fuel prices are only at two-thirds of the cost cost, which is hurting private companies. This has put Jio-BP, Rosneft-backed Naira Energy and Shell at risk of either raising prices or losing customers.
FIPI Director General Gurmeet Singh has written in the letter that selling fuel at below cost (under-recovery) to private companies is causing a loss of Rs 20-25 per liter on diesel and Rs 14-18 per liter on petrol. . Retail fuel prices have not increased since April 6. At the same time, the price of fuel sold to bulk buyers like state transport undertakings has increased in line with international prices. FIPI said that due to this a large number of wholesale buyers are buying from retail outlets, which is adding to the losses of private sector companies. In the letter, an appeal has been made to the government to intervene in this matter. FIPI said that all the petroleum marketing companies in the private sector are investing heavily in the retail sector, but at present they are facing a difficult situation. It has been said in the letter that this is affecting the ability of private companies to invest as well as operate. Also they are not able to expand their network.
