OilMin for urgent action to help oil PSUs

A day after Oil Minister S Jaipal Reddy raised the issue of deteriorating financial health of oil PSUs with Finance Minister Pranab Mukherjee, his ministry today sent a detailed note to the Cabinet Secretariat seeking urgent action.

The Oil Ministry in the note pointed that Indian Oil, Bharat Petroleum and Hindustan Petroleum together will lose about Rs 1,30,000 crore in revenue this fiscal on selling diesel, domestic LPG and kerosene at government controlled rates.

The three firms are virtually living on borrowed money as they had to raise funds to meet even working capital requirement in the absence of fuel selling price not meeting even operating expenses.

Sources in the know of the development said the three companies are losing Rs 333 crore per day on selling fuel below cost.

State-owned oil firms are currently losing Rs 9.27 per litre on diesel, Rs 26.94 per litre on kerosene sold through the public distribution system (PDS) and Rs 260.50 per 14.2-kg LPG cylinder supplied to households for cooking purposes.

While Reddy had yesterday briefed Mukherjee on the finances of the oil companies, his ministry requested for an early meeting of the high-powered ministerial panel to decide on ways to deal with the crisis.

The Empowered Group of Ministers (EGoM) meeting is being sought before the winter session of Parliament that begins on November 22.

The ministerial panel is essentially a consensus building body of the Congress-led UPA government and comprises of key allies like DMK, TMC and NC. The allies had in September scuttled plans to limit supply of subsidised LPG cylinders to 4-6 per household a year with a view to reduce subsidies.