IOC seeks LPG price hike of Rs 103/cylinder

Indian Oil Corporation (IOC) has sought an increase of over Rs 103 per cylinder of LPG and a hike of Rs 7.50 per litre of PDS kerosene in view of the increase in international prices.

International LPG and kerosene prices have risen by almost 200% to $374 per tonne and $382 per tonne, respectively, but domestic prices have not kept pace with the changes with only the LPG price being raised marginally by Rs 20 per cylinder.

"The accumulated under realisations are mounting up, month after month, due to the sustained increase in the international prices of the products affecting the cost price," N G Kannan, director (marketing) of IOC, said in a note sent to the petroleum ministry on February 1.

Based on the January 2005 prices, the ex-storge point price (ESP) of LPG should be increased by Rs 7,307.19 per tonne (Rs 103.76 per cylinder) and kerosene by Rs 7,579.72 per kilolitre (Rs 7.58 per litre), the note added.

"We request that the above increase in ESP may be allowed with immediate effect," the note said.

The government subsidy on LPG and kerosene has remained static despite the wrost-ever increase in crude prices in 2004. Oil companies have also not been allowed to raise the retail prices in step with the international prices resulting in huge under-recoveries.

IOC has estimated its loss on LPG and kerosene sale at Rs 7,566.80 crore in the current fiscal.