My role as the petroleum minister is to inform the Cabinet and the Prime Minister about the price situation. And then, in consent with my colleagues, as well as under the stewardship of the Prime Minister, take decisions which are essentially political although they deal with a crucial economic matter, Mr AIyar told reporters.
Domestic refiners including Indian Oil Corporation (IOC), Bharat Petroleum (BPCL) posted their first ever quarterly losses as a result of the caps imposed by the government on product prices even as international crude oil prices soared.
The US light, sweet crude has risen 40% this year and is just over a dollar below the record of $62.10 hit on July 7. OPEC is pumping oil at a 25-year high, leaving little spare capacity to deal with sudden disruptions. Around 100,000 bpd of output from Indias Bombay High oilfield will be shut for at least a month after fire. The loss of domestic output will add to refiners woes as they would have to import more crude oil which is more costly.
Mr Aiyar said losses in the April-June quarter were inevitable. What is perhaps even more worrying is that in July, after we revised the prices, these companies, or some some of them, still appear to be making losses, and having difficulties meeting their investment targets.
He said he had informed the finance ministry and the Prime Minister about the plight of PSU refiners. Junes increase in administered petrol and diesel prices only partly compensated refiners for a 20% rise in crude costs since November, when fuel prices were last increased.
The Rs 3,194.52-crore under-realisation on petrol, diesel, LPG and kerosene was after ONGC and GAIL chipped in Rs 1,674.67 crore subsidy, without which IOCs loss would have been close to Rs 1,000 crore.