Reddy rules out diesel price hike as oil firms' retail losses mount to Rs10.74 per litre

Minister for petroleum and natural gas Jaipal Reddy has ruled out any immediate increase in the price of diesel, the preferred fuel of transporters and farmers, even as losses on retail sales of state-owned oil marketing companies (OMCs) rose to Rs10.74 per litre.

The government has resisted from freeing diesel from price controls considering its possible impact on an already rising inflation rate and also as a matter of political expediency.

His statement comes at a time when state-run OMCs in the country pile up losses by continuing to sell diesel below cost despite international crude prices touching the $100 per barrel mark.

"We are not at the moment thinking of increasing prices," the minister said.

At the prevailing prices of crude oil, oil marketing companies in the country, including Indian Oil Corporation Ltd (IOC), Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) are expected to end the current fiscal with revenue losses of around Rs80,000 crore on selling diesel, domestic LPG and kerosene below cost.

The three OMCs together are losing over Rs247 crore per day in revenue on selling diesel below its imported cost.