The government on Monday asserted that the price hike in auto and cooking fuel was inevitable and refuted charges that the government raised fuel prices despite state-owned retailers posting profits last fiscal.
The profits made by state-run fuel retailers IOC, BPCL and HPCL were inconsequential when compared to the massive scale of their turnover and the profits were possible only after their financial burden due to selling cheap fuel was compensated by the state and upstream oil companies, according to data released by the petroleum ministry.
Indian Oil Corporation posted a profit after tax of Rs 10,221 crore, which was only 3.7% of its turnover. BPCL recorded a profit after tax of Rs 1,538 crore, which was 1.1% of its turnover, while HPCL posted a profit of Rs 1,301 crore, which was merely 1.2% of its turnover, ministry officials said.
The profits may look impressive, but these profits have been made possible after the government and upstream oil PSUs have contributed subsidy of Rs 40,430 crore to the retailers during 2009-10, the official said.
The ministry also said refiner-cum-retailers are required to make huge investments for meeting the country?s present and future energy needs. The plan outlay for the current fiscal is is Rs.12,825 crore for IOC, Rs.3,022 crore for BPCL and Rs.3,924 crore for HPCL.
?These resources have to be generated by the refiner-cum-retailers internally. In the backdrop of their plan expenditure, their profits can not be described as being very high,? the official said. Justifying the price revision, officials said that while petrol and diesel prices in India are broadly comparable with that of the neighboring countries, the prices of public distribution Kerosene and domestic LPG in India are the lowest among the South Asian countries. While an LPG cylinder costs Rs 345.35 in Delhi, the same costs Rs 822 in Sri Lanka, Rs 537 in Bangladesh and Rs 577 in Pakistan, officials said.