Consumption of Petrol in the country has grown at 4.5 percent in current year as compared to 8-9 percent growth in past year due to rising price of the fuel and falling automobile sales, PK Goyal, Director Finance, IOC told CNBC-TV18 today.
"The automobile sale is low by 8-9 percent for last three-four months, so definitely growth will be less. If economy is not progressing as per the last year definitely there will be less growth," Goyal noted.
Oil marketing companies raised petrol price by a steep Rs 1.55 a litre on Sunday, the fourth increase in rates in six weeks, as falling rupee made oil imports costlier.
Goyal said that although petrol consumption growth is slowing it is not an alarming reduction. The government had deregulated petrol prices last year.
Diesel under recovery
Oil marketing companies will review the diesel price hike on towards the end of July. Diesel price was hiked 50 paise per litre excluding VAT on July 1. This was the seventh hike in diesel price since January when the government authorised state-owned oil firms to increase prices by up to 50 paisa per litre every month till entire losses on the fuel are wiped out.
Goyal said that the current diesel under recovery had widened to Rs 9.45 per litre from Rs 8.10 per litre in the beginning of July. Although OMCs will review diesel prices by the endof this fortnight, from the current prices and under recoveries it seems that he under recoveries for August, would be higher than July.
Post sharp depreciation in rupee in past three months oil marketing companies also had a talk with government to increase the quantum of diesel price hike from 50 paise to one rupee. Reacting on the possibility of increase in quantum of diesel price Goyal said, "That decision government has to take; it is too early to say. This 50 paisa increase is based on the cabinet decision."
Currently total under recovery on diesel for the industry stands at Rs 1,25,000 crore. Goyal said that in case of other fuel such as LPG under recovery is at Rs 368 per cylinder, while on kerosene it is at Rs 30.53 per litre.
LPG consumption has fallen after government regulated the subsidy to 9 cylinders per year per household. Government has also been able to eliminate lot of ghost and duplicate cards following the due diligence. “There is lot of duplicate connections that has been taken out from the system,” Goyal said.