As according energy minister Hardeep Puri, the government ought to reimburse oil marketing firms (OMCs) for the financial blow they sustained by selling gasoline and diesel below market rates. The three state-run OMCs, Indian Oil, Hindustan Petroleum, and Bharat Petroleum, are suing for damages after maintaining frozen domestic retail pricing in 2022 even while global prices skyrocketed. The government gave OMCs a one-time grant of 22,000 crore a few months back to offset their losses on cooking gas. "Now they are
telling us, look, we have taken a hit on petrol and diesel also. Their first half (2022-23) losses were about 28,000 crore. So, they are coming to us. It's under discussion," Puri said. "As a minister, I'm supporting them. Because tomorrow, you know, we might face the same situation again, and the guy goes into liquidation because you didn't bail him out. Next time you won't have the capacity," he added. The minister didn't specify the amount OMCs have sought or what the government is willing to give. The companies expect an announcement on compensation in the budget.
OMCs sold petrol and diesel at prices far below international rates for several months last year. But in the October-December quarter, they are estimated to have made a profit of 10 per litre on the retail sale of petrol and lost 6.5 per litre on diesel on average, as per ICICI Securities.
Puri said Indian private and state-run refiners will continue to buy crude from whoever offers it at the cheapest rate. This was in response to a query on the Indian purchase of oil from Russia. Oil prices are unlikely to hit $110 per barrel, as predicted by some analysts until producers suddenly start cutting back supply or demand in consuming countries suddenly lifts.
