With softening of crude prices trimming oil retailers' losses, state-owned Hindustan Petroleum Corp (HPCL) today said it will reduce petrol price if the global rates were to go down further.
HPCL, like other public sector fuel retailers, is still losing Rs 4.50 per litre on petrol despite the steep Rs 5 per litre hike in rates, which took effect on May 15.
"The losses in June [which will take into account the average international oil price in the second fortnight of June] will come down to about Re 1 per litre," HPCL Chairman and Managing Director S Roy Choudhury told reporters here.If the rates were to fall further, the company will cut petrol price, he said.
"Prices may go up, prices may go down [in future] depending upon the situation," HPCL Director (Finance) B Mukherjee said.
The government had in June last year freed petrol price from its control but state-firms, which continue to be guided by 'advice' from the oil ministry, did not raise price in the run up to assembly elections in five states, including West Bengal and Tamil Nadu.
HPCL and other state-owned firms Indian Oil Corp (IOC) and Bharat Petroleum Corp (BPCL) are currently losing Rs 488 crore per day on selling diesel, domestic LPG and kerosene, rates of which are controlled by the government.
"Current under-recovery [revenue loss] on diesel is Rs 14.64 per litre, Rs 28.26 a litre on kerosene and Rs 329.68 per cylinder on LPG. The under-recoveries on diesel and kerosene is expected to go down from June 1 while that on LPG will rise," Mukherjee said.
These revenue losses have been calculated taking into account the average rate of first fortnight of May. From June 1, which will take into account the average price of second fortnight, under-recovery of diesel is likely to be Rs 12.45 per litre, around Rs 26 per litre on kerosene and Rs 380 per LPG cylinder, he said.
An Empowered Group of Ministers (EGoM) is likely to meet on June 9 to consider raising prices of all the three commodities.
"Price of diesel, LPG and kerosene will have to go up [to cover for rise in input crude oil cost]. What EGoM has to decide is by how much," an Oil Ministry official said today.
State-owned oil firms had earlier this month hiked petrol price by a steep Rs 5 per litre and the Oil Ministry may push for a Rs 4 per litre increase in diesel and at least Rs 20-25 hike per 14.2 kg-cylinder in domestic cooking gas (LPG) rates.
Kerosene price hike, too, is on the cards.
"There is no escaping this time... Nothing can be treated as sacred," the official said, stressing that rates of all three commodities will be hiked.
