State-run oil companies considering cutting petrol prices by Rs. 2
New Delhi: There seems to be good news around the corner for the citizens of India. Last week when the state-run oil companies announced that the petrol rates will have to be raise by almost Rs.7.50 across the country to cover losses, it led the economy in a total state of disarray. However, today, state-run oil companies have made an informal announcement of sort claiming that they are ready to cut prices of petrol by about 2 per litre after reporting strong earnings. This is a clear indication signalling a surprise turnaround in the sector that scared investors with talk of astronomical losses from subsidised fuel sales.
Oil marketing companies could cut retail price of petrol by about 1.67 per litre (about 2 after taxes) from June 1 in view of the drop in the average rupee price of petrol in the international market, Hindustan Petroleum Corp Chairman & Managing Director S Roy Choudhury told reporters.
If reports are to be believed then
HPCLs fourth-quarter net profit jumped to 4,631 crore, more than four times its earnings a year ago. Indian Oil, which reported an over-three-fold jump in fourth-quarter net profit to 12,670 crore,
is also keen to pass on the benefit of lower international prices to customers.
IOC Chairman RS Butola said: We will pass on the entire benefit to consumers. I would like to pass on 50 paise, 70 paise or 90 paise, whatever we gain, to consumers in the next pricing cycle.Profits of oil marketing companies were boosted by the highest-ever contribution of 44,466 crore from Oil & Natural Gas Corp (ONGC).
Despite the generous contribution given through state-mandated discounts on crude oil sales ONGCs fourth-quarter profit doubled to 5,644 crore while PAT (profit after tax) for the entire fiscal rose 33% to 25,123 crore. The state exploration company supplies crude oil at a rate linked to the dollar price of international grades of oil.
The depreciation of the rupee and an increase in international prices in the last quarter, thus, led to windfall gains for ONGC. State-run refiners had earlier complained that their combined revenue loss from the sale of fuel at government-determined rates would amount to 1.38 lakh crore in 2011-12, and they would post losses for the full year.
Citing prospects of heavy losses, oil marketing companies had raised the pre-tax price of petrol by 6.28 per litre last Wednesday, immediately after the budget session of Parliament.
State-run oil companies considering cutting petrol prices by Rs. 2 | News Views
