Biggest petrol price hike in a single tranche: RS Sharma

In one swift move, state-owned oil firms IOC , BPCL and HPCL hiked petrol price by Rs 6.28 per litre, effective midnight. Including sales tax, the hike adds up to Rs 7.50/litre.

"Surprisingly, this is a biggest hike in a single tranche and done so far immediate reactions are going to be severe," said RS Sharma, ex-chairman of ONGC.
"IOC is losing Rs 13.64 on per litre of diesel. From April 1 to May 31 Indian Oil has already lost Rs 10,680 crore under recovery on this and industry has already incurred a under recovery of Rs 20, 260 crore on diesel itself," said PK Goyal, Director - Finance, IOC. Below is the edited transcript of the interview. Also watch the accompanying video.
 
Q: What is your view on the quantum of petrol price hike of Rs 6.28 per litre, effective midnight? RS Sharma: Surprisingly, this is a biggest hike in a single tranche and done so far immediate reactions are going to be severe. Q: Wasn’t diesel something that needed to be acted upon rather than petrol and to this extent? RS Sharma: I agree with you. Diesel clearly heads in under recovery followed by LPG, petrol and kerosene. Petrol prices get deregulated as per the government decision so it is just implementing the decision now, which should have been done much earlier. The hike was expected and definitely some correction was warranted in the prices of diesel as well as LPG also. Q: Clearly this hike which in the past you planned to initiate in a regulated manner, came as a shock to consumers. What is your view on this? PK Goyal: No, it’s not a shock to the consumer. We have issued a press release in the last month were we have mentioned that oil companies are incurring huge under recoveries on petrol, but we have taken up the matter with the government either to make petrol as a control product so that we can get compensation from the government or reduce the excise duty up to the level of the under recovery, which the oil companies are incurring, but when no compensation in this regard has been given to oil companies, we have no other alternative to increase the prices. Q: When is the diesel price hike expected if at all? PK Goyal: This is a controlled product, which I can’t comment on it. Government of India has to take a decision in this regard. Q: What is the total under recovery stroke loss that is being suffered by your company on account of diesel, which you sort of watch daily? PK Goyal: IOC is losing Rs 13.64 on per litre of diesel. From April 1 to May 31 Indian Oil has already lost Rs 10,680 crore under recovery on this and industry has already incurred a under recovery of Rs 20, 260 crore on diesel itself. Also Read: Experts debate: Is diesel, LPG, kerosene price hike next? Shocked auto sector accuses Re, plans to turn diesel Biggest petrol price hike in a single tranche: RS Sharma