Oil retailers deny making big profits; say only bailouts keep them afloat
04 June 2012
The three state-run oil marketing companies on Sunday rebutted media reports that in spite of constantly carping over losses caused by subsidised fuel sales, they had made large profits in 2011-12, enabling them to roll back some of the recent hike in petrol prices.
In fact it was only a subsidy compensation package of Rs1,38,500 crore that enabled them to declare nominal profits for the year, the chairmen and managing directors of Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp said in a joint statement.
"The OMCs have been incurring huge losses. The companies incurred losses due to sale of three products - diesel, domestic gas and kerosene - at highly subsidised prices," the statement said.
"It is only after the assistance of Rs83,500 crore from the government and Rs55,000 crore from the upstream oil companies (Oil & Natural Gas Corp, Oil India Ltd and gas distributor GAIL Ltd) that the three public sector OMCs could declare nominal profits. Had this assistance not been given, the OMCs would have reported a combined loss of Rs1,32,000 crore," the company heads added.
Apart from the media, union minister Vayalar Ravi ad defence minister AK Anntony too had questioned their claims of making losses as they raised petrol prices by a sharp Rs7.50 per litre two weeks ago, leading to a nationwide protest 'bandh'. The hike was cut by Rs2 a litre by the OMCs on Saturday.