Government rejects private oil retailers' demand for subsidy
17 Aug 2006
Mumbai: The government has rejected private oil retailers demand for an equal compensation, on a par with public sector oil companies, to make up for losses they suffer on petrol and diesel sales. The private retailers include Reliance Industries Ltd.
"The private sector oil companies have demanded subsidy from the government for the losses they have sustained on sale of petrol and diesel. However, since they are not subject to pricing restrictions by the government, there can be no compensation for marketing of petrol and diesel within the country by them," petroleum minister Murli Deora told the Lok Sabha in a written reply.
Deora said all companies, including PSUs namely ONGC, MRPL and NRL, have been allowed to market petrol and diesel when the sector was deregulated in 2002. These companies were not covered by the subsidy sharing mechanism and they were free to take their own pricing decisions, he added.
The government subsidy was only available to Indian Oil Corp, Bharat Petroleum, Hindustan Petroleum and IBP.
RIL, meanwhile, said it is losing Rs 3.37 per litre on petrol and Rs 5.77 a litre on diesel despite pricing the auto fuels about Rs 2.50 a litre higher than the price charged by PSU firms. This is because the PSU oil retailers are compensated for the losses through discounted crude sales by ONGC and the issue of oil bonds.
