Guwahati, May 13: The Numaligarh Refinery Ltd (NRL) will increase the prices of petrol and diesel at its retail outlets to contend with the phenomenal rise in crude prices and the non-payment of compensation by the Centre.

In case of the refinery, there has been an unprecedented rise from $68.66 per barrel in April last year to $111.94 per barrel this year.

“While this amounts to an increase of around Rs 11 per litre in the crude price, the retail selling price has increased only by Rs 2 per litre for petrol and Rs 1 per litre for diesel, effected in February. This has resulted in huge losses to companies engaged in petroleum retailing. The current loss for the industry as reported is around Rs 14 per litre for petrol and Rs 21 per litre for diesel,” a senior official said.

The increased prices will be notified shortly.

The official said the company is not given compensation against retail marketing losses. The three public sector companies — Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) — receive compensation in the form of discounts in crude oil purchased from OIL and ONGC as well as oil bonds received from the Centre.

“Because of the non-availability of any such compensation mechanism, the retail marketing losses of NRL have been mounting over the years and if retail prices are not increased correspondingly, the losses for NRL may go up to Rs 400 to Rs 500 crore in 2008-09,” the official said.

“The average sale of NRL retail outlets was 256 kilo litre per month during the last financial year vis-à-vis estimated industry average of around 140 kilo litre per month,” the official added.

The official said such huge losses might eventually render NRL economically non-viable. “In order to prevent such a situation, NRL is left with no other alternative but to increase the retail prices of petrol and diesel, at least to partially reduce the retail marketing losses,” he added.

The company is talking to the dealers to offer them a compensation package. “We agree that we will lose customers but cannot also stop selling in order to keep running,” the official said.

The idea behind setting up of retail outlets was to create a distinct identity in petrol retailing through innovation, world class infrastructure and services different from the established market players.

Fact file

NRL commenced production from 2000

Ventured into retail marketing from 2004, with the Centre’s authorisation

Opened its first retail outlet in 2005

NRL has 11% market share in the Northeast

Of the 108 retail outlets in the country, 61 are in the Northeast