Monday 2 April 2012
Top executives at Indian Oil, Bharat Petroleum Corp and Hindustan Petroleum Corp Need To Raise Fuel Prices ImmediatelyELY
Top executives at Indian Oil, Bharat Petroleum Corp and Hindustan Petroleum Corp told ET that independent directors were regularly asking 'uncomfortable questions' about their decision to sell petrol below market price.Executives at oil companies said the pressure was mounting. Petrol prices need to be raised by about Rs 9 per litre to bring them on par with international rates.
But before raising prices, state companies always informally seek the oil ministry's permission, which has not been granted since December because of assembly elections and fear of objections from allies such as Mamata Banerjee.
Given the severe strain on their finances, oil companies need to raise petrol prices immediately, executives said. The three companies reported a combined net loss of about Rs 15,000 crore in the first three quarters of 2011-12. "We can't wait any longer. We have to take a decision in a day or two," the chairman of an oil firm said, requesting anonymity.
"We will find it very difficult to explain our pricing decision to independent directors. They have already raised many questions. They say that we should at least raise the price of petrol, which is a deregulated fuel," the chairman said.
The chairman of another state oil company said it was difficult for them to convince independent directors why petrol prices have been frozen since December. Oil companies were ready to raise petrol prices on March 31. "Essential personnel were called on Sunday expecting a hike, but it could not be done due to political reasons," said an oil company executive directly involved in fuel pricing.
But before raising prices, state companies always informally seek the oil ministry's permission, which has not been granted since December because of assembly elections and fear of objections from allies such as Mamata Banerjee.
Given the severe strain on their finances, oil companies need to raise petrol prices immediately, executives said. The three companies reported a combined net loss of about Rs 15,000 crore in the first three quarters of 2011-12. "We can't wait any longer. We have to take a decision in a day or two," the chairman of an oil firm said, requesting anonymity.
"We will find it very difficult to explain our pricing decision to independent directors. They have already raised many questions. They say that we should at least raise the price of petrol, which is a deregulated fuel," the chairman said.
The chairman of another state oil company said it was difficult for them to convince independent directors why petrol prices have been frozen since December. Oil companies were ready to raise petrol prices on March 31. "Essential personnel were called on Sunday expecting a hike, but it could not be done due to political reasons," said an oil company executive directly involved in fuel pricing.
