The dues of the three public sector oil majors Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum from the oil pool account are set to rise by Rs 250 crore following a 12 per cent hike in freight charges announced in the railway budget.
Back-of-the-envelope calculations show the arrears of Bharat Petroleum and Hindustan Petro-leum rising by around Rs 50 crore each and those of Indian Oil by around Rs 150 crore. The arrears of Indian Oil are higher on acount of its size and higher capacity.
Government estimates prior to the railway freight hike show that the deficit in the oil pool account has already crossed Rs 15,500 crore.
While announcing the hike, the railway minister exempted certain commodities like LPG, kerosene from the hike. But other petroleum products like high-speed diesel, petrol and aviation turbine fuel will be subjected to the hike.
Nearly 40 per cent of all petroleum products are moved by the raiways.
Under the administered pricing mechanism (APM), the freight cost of the oil companies are fully reimbursed by the Oil Coordination Committee (OCC) which manages the oil pool account.
Industry sources say the margins of companies will not be under pressure. Only their arrears will go up, which will be settled as and when the oil pool account has the money.
