Post poll petrol price hike on IOC agenda
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- Published 26.04.11
|Butola: Cash worry|
New Delhi, April 25: State-owned refiner Indian Oil Corporation today said petrol prices could be hiked soon after the assembly polls in five states were over.
The polls are for electing governments in Bengal, Tamil Nadu, Assam, Kerala and Puducherry. Counting of votes in all the five states are on May 13.
“We would do it (increase rate) at the earliest possible … we live in an environment (comprising the people and the government). If we take certain action, the environment is going to turn against us,” IOC chairman R.S. Butola said.
In his first interaction with the media after taking over as the chairman of the nation’s largest fuel marketing firm, Butola said IOC and the other state firms — BPCL and HPCL — had consciously decided not to revise rates of petrol to keep “the environment happy”.
The government had in June last year freed petrol pricing from its control, and state-run firms on seven occasions had changed rates in line with international prices before deciding in the second half of January to freeze rates.
IOC is losing a tad less than Rs 7 per litre on petrol at present. It is losing Rs 18.11 per litre on diesel, Rs 28.33 a litre on kerosene and Rs 315.86 per 14.2-kg domestic LPG cylinder.
The basket of crude that India buys averages $120 per barrel at present. However, the retail petrol rates are related to global prices at $100 a barrel. Brent crude rose above $124 a barrel in the futures market today after violence in Syria and Yemen escalated.
The government had in June last year allowed state-run oil firms to fix the price of petrol but continued to control the prices of diesel, kerosene and cooking gas to control inflation.
Butola said IOC planned to foray into the merchant power business while consolidating its leadership position in fuel retailing and oil refining businesses.
IOC has power plants at each of its eight refineries in the country to meet its captive requirement, and it is now looking at generating electricity from pet coke — a by-product that comes from processing crude oil — for sale to others. “We are looking at entering into the merchant power business. We have synergy as well as feedstock for that,” Butola said.
The company has 1,100-1,200MW of captive power generation capacity, with most of the refineries having surplus power to trade outside.
IOC’s Digboi refinery in Assam has 5MW of surplus power, for which an agreement has been signed to give it to the Assam grid.