Seek one-time hike in diesel price: IOC

With rupee depreciating 12 percent against the US dollar and making imports costlier, state-owned oil firms have demanded a one-time steep increase in diesel rates to make up for the widening losses.

PK Goyal, IOC Director - Finance, spoke to CNBC-TV18 on the impact of rupee fall on under-recoveries and crude payment.

On under-recoveries

The IOC management has sought increase in diesel prices on an ad-hoc basis. He sees FY14 under-recoveries at Rs 1.40 lakh crore against estimated Rs 80,000 crore.

Also Read: IOC to invest Rs 8,000cr for Koyali refinery expansion

Impact of rupee depreciation

Rupee has depreciated roughly 12 percent during the current year, says Goyal. On April 1, rupee was at 59.39/ USD and now it is at 64.10/USD. "One rupee depreciation increases under-recoveries for the sector by roughly Rs 8,000 crore per year and crude payment for IOC jumps by Rs 4,800 crore," he adds. 

Diesel price hike

On diesel price hike, he says prices are being increased in the range of 40-50 paise per month as per the instructions from the ministry. Goyal says the government needs to take a call on whether to increase diesel prices on a lumpsum basis or not.