State levies pushed us to hike petrol price: IOC

Indian Oil Corporation is set to hike petrol prices by Rs 1.8 per litre, applicable from midnight today. Sources say that other oil marketing companies such as HPCL and BPCL are also likely to follow suit. While the move surprises with regard to the fact that internal crude prices are on the wane, with clarity on government subsidy sharing still evading the industry, this move to pass on cost seems warranted.

CNBC-TV18 catches up with PK Goyal, director of Finance at IOC to get more details.
He says that rupee depreciation has played devil, due to which, net under-recoveries is nearly Rs 1.52 now. But he points to state levies as the primary reason to hike cost. Below is the edited transcript of the interview. Also watch the accompanying video. Q: Oil marketing companies have gone ahead and hiked prices by Rs 1.80 now, but just a month and a half back, they had increased prices by Rs 3.14 a litre. What's the rationale, considering we have been seeing international crude prices coming down?
A: Reason is that rupee has depreciated from Rs 46.29 to Rs 49.40, that is by Rs 3.11 and due to this, our under recovery is Rs 2.49. But because the prices of MS has come down globally from USD 125 to USD 122, there is over recovery of Rs 0.97, so net under recovery is Rs 1.52 for IOC at Delhi. Q: So if it is Rs 1.52 a litre, I am understanding that you are increasing it to Rs 1.80 a litre, that 30 paisa is on account of the state levies?
A: Yes. Q: The other thing that I wanted to ask you was that you are losing Rs 333 crore everyday selling subsidized LPG, kerosene, diesel - any feelers from the government, the finance ministry, from anyone, whether there will be an upward revision of these fuels?
A: No, we have no information in this regard till date. Q: Have you got compensation from the centre, that Rs 15,000 crore that have been promised to the three oil marketing companies for Q1?
A: We have received only the letter, we have not received the cash till date.