New Delhi: Public sector oil marketing companies (OMCs) continue to incur heavy losses on the sale of petrol, diesel and cooking gas despite recent price hikes, the government said on Monday.
Based on prevailing prices in Delhi, OMCs are currently facing an under-recovery of around Rs 30 per litre on diesel and Rs 6 per litre on petrol, officials said at an inter-ministerial briefing on the West Asia conflict.
The under-recovery on domestic liquefied petroleum gas (LPG) stands at about Rs 700 per cylinder. This comes despite two recent increases in LPG prices–a Rs 60 hike in March and a further Rs 29 increase on Saturday–which have taken the retail price of a 14.2 kg domestic cylinder to Rs 942 in Delhi.
“OMCs daily losses are still to the tune of Rs 600-700 crore per day on petrol, diesel and LPG,” Praveen Mal Khanooja, Additional Secretary, Ministry of Petroleum and Natural Gas, told reporters.
Asked whether the latest LPG price hike would reduce the losses borne by OMCs, Khanooja said it would be difficult to assess any substantial impact as the Saudi Contract Price (CP) benchmark for LPG continues to remain elevated due to strong demand.
Saudi CP is the key international benchmark used for pricing LPG globally.
In a press note Sunday, the Modi government had said that the import-linked cost of a 14.2 kg domestic LPG cylinder has risen to over Rs 1,600 after a 46 percent increase in the Saudi CP benchmark between February and June.
To meet domestic demand, Khanooja said LPG production has been ramped up significantly due to limited supply availability from international markets.
According to Khanooja, before the conflict, average LPG production was around 32,000 metric tonnes but a control order enabling the shifting of C3 (Propane) and C4 (Butane) molecules has led to an increase in production.
Domestic LPG production has increased by around 60 percent to 52,000–53,000 metric tonnes per day, officials informed.
Even as refineries undergo scheduled maintenance during the monsoon season, production is expected to remain in the range of 45,000–50,000 metric tonnes per day.
On commercial LPG supplies, Khanooja said availability has recovered to around 70–75 percent of pre-conflict levels. “Before the conflict, we were selling around 8-9 thousand metric tonnes (TMT) of commercial LPG, we have now reached around 6 TMT.”
The ministry also announced changes to the subsidy structure under the Pradhan Mantri Ujjwala Yojana (PMUY). Under the scheme, beneficiaries receive a subsidy of Rs 300 per 14.2 kg cylinder, bringing the effective price paid by Ujjwala households to Rs 642 per cylinder after the latest price increase.
However, the number of subsidised refills has been reduced from nine per year to four. Officials said the revision reflects actual consumption patterns among beneficiaries.
“The average consumption for an Ujjwala customer is 4 to 5 cylinders per year, that is why the initial 4 refills are being subsidised with Rs 1,200 per year,” Khanooja said.
He added that the annual subsidy of Rs 1,200 is over and above the Rs 700 per-cylinder under-recovery currently being absorbed by OMCs.
Meanwhile, the Ministry of Ports, Shipping and Waterways said an empty crude oil tanker carrying Indian crew members reported a fire incident on Monday afternoon.
“This is the preliminary information which we have received, based on which as per available information, all Indian seafarers are presently safe,” Opesh Kumar Sharma, director in the ministry, said.
MT Marivex, a Madagascar-flagged crude oil tanker carrying 24 Indian seafarers, reported the fire at around 1:30 pm. While the cause of the incident remains unclear, Sharma said the vessel was operating well outside the Strait of Hormuz region.
(Edited by Tony Rai)
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