State-run Indian Oil Corporation (IOC) has asked the Centre for duty restructuring on refined products as well as crude oil in the upcoming Budget. The country’s largest refiner is reeling under price pressure and its borrowings are anticipated to touch Rs 60,000 crore soon.
“We have requested the government to review duties on petroleum products in the upcoming Budget. The customs duty of five per cent on crude oil and excise duty on petrol and diesel needs to be reviewed. Customs duty was increased last year when prices were much lower,” said S V Narasimhan, Chairman of IOC, on the sidelines of a refinery technology meet here today.
Currently, oil companies are incurring losses of Rs 9.55 on sale of every litre of diesel, while for petrol it is around Rs 2. “Companies are paying about 45 per cent in the form of duties on per litre of petrol,” he said.
Narasimhan expressed hope that despite uncertainities in Egypt and Yemen, the global crude prices will come to a normal stage with in three weeks. On Thursday, light sweet crude prices were above $85, while Brent crude was hovering around $104 a barrel globally.
Meanwhile, the country’s largest refiner may see its total borrowings going up to Rs 60,000 crore soon. “In December, our borrowings were around Rs 50,000 crore and now it has touched Rs 55,000 crore. It may even reach Rs 60,000 crore, but by March will again come down to the Rs 50,000-crore mark as we expect a financial support of Rs 11,000 crore from the government,” he said.
However, the fuel retailing company would invest about Rs 13,000 crore during the next financial year. “Our total capital expenditure for the next financial year would be around Rs 12,000-13,000 crore. Majority of this will be used for the refinery project in Paradip. The project will be fully commissioned by November 2012,” the chairman said.
FPO postponed indefnitely
The IOC chairman also hinted that the company’s proposed follow on pubic offer (FPO) may be postponed till the market situations improve. “This is not an ideal situation for it, because of unfavourable market conditions and rising crude oil prices. The company will decide on it later at an appropriate stage,” he added. IOC was planning to raise close to Rs 20,000 crore from the issue by selling 10 per cent of its stake.
