Marketing Directors of Indian Oil, Hindustan Petroleum and Bharat Petroleum in a joint petition to the petroleum ministry yesterday suggested cost-cutting measures as their losses on sale of petrol, diesel, LPG and PDS kerosene mounted to over Rs 550 crore a day, a top official said.
The government's bar on oil firms to raise fuel prices despite cost of crude oil doubling to over $120 a barrel, is likely to see the three firms end the current year with a revenue loss of Rs 200,000 crore. Last year, the revenue loss was Rs 77,304.50 crore.
"Oil companies are borrowing Rs 3,500 crore per month to keep their operations. Our borrowings (for the three firms) have reached Rs 65,000 crore. We have suggested measures that will at least limit the losses at existing levels," he said.
Stopping issuance of new LPG connections would help limit the Rs 305.90 per cylinder loss. Besides, quota per family will be fixed and expansion of retail network put on hold.
Other measures include stopping import of fuels like diesel, for which high international prices have to be paid. Though the nation is short in LPG and diesel production this year, the companies have suggested managing demand within the existing production.
The oil companies, who are owned by the government, will need approval of the ministry for the suggestions to come into effect.
