Union Petroleum Minister Murli Deora has admitted that the financial position of the state-run oil marketing companies (OMCs) remains a matter of concern.
Despite the recent hikes in the administered prices of petrol and diesel, he said, the OMCs are likely to report Rs 50,000 crore of under-recoveries.
He was speaking to reporters after commissioning of an aviation turbine fuel pipeline of Indian Oil Corporation and a seawater desalination plant of Chennai Petroleum Corporation Ltd here on Saturday.
Earlier, in his address at the inaugural function, he said the recent times have been challenging and demanding for the oil industry. The high global crude oil prices over the last two years in particular has impacted the national economy. The under-recoveries of OMCs in 2008-09 was as much as Rs 1.03 lakh crore. “The financial position of OMCs continues to be a matter of concern. To maintain their financial health, the government was left with no other alternative but to increase the prices.”
However, he said, if international crude prices drop, then the ministry would consider reducing the petrol and diesel prices. Earlier, he recalled, when crude prices had come down a few months earlier, the government had immediately reduced the prices of fuels. Every effort was being made to insulate the “aam aadmi” from the volatility of global crude oil prices.
“Accordingly, no increase was affected in the prices of kerosene and domestic LPG, which will lead to oil companies having another Rs 50,000 crore of under-recoveries in 2009-10.”
