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Govt asks oil retailers not to raise petrol, diesel prices: Sources

Companies including IOC, Bharat Petroleum and HPCL will have bear a loss of up to Rs 1 per litre on sale of diesel and gasoline

Siddhartha Singh | Bloomberg 

A note of caution
Oil Minister Dharmendra Pradhan

India’s state-run retailers have been asked not to increase retail diesel and gasoline prices and absorb a part of the losses due to the recent recovery in global crude oil, people with knowledge of the matter said.

Companies including Indian Corp., Corp. and Hindustan Petroleum Corp. will have bear a loss of up to 1 rupee per liter on sale of diesel and gasoline, the people said asking not to be identified as the matter is private. Shares of Indian fell as much as 7.6 percent in Mumbai, the most since November 2016 in intraday trading, while lost as much 8.3 percent.

Prime Minister Narendra Modi’s administration wants to keep prices under check to shore up popular support ahead of a series state elections this year. The South Asian nation, which imports more than 80 percent of its annual crude requirement, wants to see prices at about $50 a barrel in order to manage its finances better, Minister Dharmendra Pradhan said in an interview.

A cut in excise duty on is unlikely due to sluggish revenue collections on the back of a botched rollout of the Goods and Services Tax, the people said. The ministry has been asked to prepare subsidy payments at different price points in case of a further run up in prices.

is not aware of any directive from the government to absorb a part of the losses from higher crude prices, the company’s chairman, M. K Surana, said on the sidelines of the International Energy Forum in New Delhi.

While Modi has reaped the benefits of the biggest price crash in a generation since coming to power 2014, is recovering as the government gears up for elections in 2019. Since hitting a low of $ 27.1 per barrel in 2016, Brent crude is currently trading around $70 level.

First Published: Thu, April 12 2018. 01:23 IST
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