Referring to the new pricing structure that Indian Oil Corporation (NOC) issued on Wednesday, NOC has said that its import price for diesel has gone up by 50 paisa per liter. The price of petrol too has increased by Rs 4.60 per liter. [break]
“With the new rates, the corporation now suffers a net loss of one rupee per liter of diesel,” said Bachchu Kafle, deputy managing director of the corporation. As NOC was earning a profit of about Rs 4 per liter of petrol so far, the new pricing will inflict loss of some 60 paisa per liter of petrol as well.
As goes with the bilateral pricing arrangement, IOC has left the export prices of kerosene and liquefied petroleum gas (LPG) untouched. This means, the corporation will continue to earn profit of some five rupees per liter of kerosene throughout this month.
However, it will continue to suffer a whopping loss of some Rs 178 per cylinder (14.2 kilograms) of LPG. “This single product of LPG alone will inflict losses worth around Rs 180 million to the corporation,” said another NOC official.
Although typically an urban household fuel and consumed by relatively well off consumers, the government has continued to provide subsidy on LPG.
Given that the corporation´s bulkiest loss has been coming from LPG business, NOC of late has pushed the government to adjust its prices, raising it by some Rs 100 per cylinder. But the government that has not yet deregulated petroleum prices has continued to turn down its proposal, fearing possible public ire.
“We managed to end subsidy regime on kerosene -- the fuel of the poor. But unfortunately, we have failed to avoid it in case of LPG -- the fuel of relatively better income groups,” said the source.
“This shows how crooked our policy priority is. Unfortunately, our call to straighten the policy priority has fallen on deaf ears,” said the NOC official.
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