Oil PSUs under-recovery to lessen by Rs 20,000cr: BPCL

In an interview to CNBC-TV18 RK Singh, chairman and managing director of BPCL pointed out that post diesel price hike, under recoveries of public sector oil companies will now reduce by Rs 20,000 crore. A price increase of Rs 5 will reduce diesel loss by Rs 3.5 per litre now, he added.

The sales of subsidised LPG cylinders has been restricted to six per consumer annually, so, the price beyond six cylinders will go up to Rs 750 per cylinder, he said. Meanwhile, he doesn’t see the need for raising petrol prices in the near-term.  "We were losing about Rs 6 per litre and the excise duty cut will bring about Rs 5.30 paise per litre. So it’s almost balanced. I do not think there is any need of increase in petrol price as of now," he explained. Below is the edited transcript of Singh’s interview to CNBC-TV18. Q: Now that the diesel prices have been hiked what would the absolute under recoveries be in the next quarter? A: I have not worked out the figures, but certainly oil companies as a whole would stand to benefit by Rs 20,000 crore or so for the entire year. I am not very sure of the figure for BPCL, but from Rs 5 hike, oil companies are going to make Rs 3.50 in effects because Rs 1.50 will go by way of increase in excise duty. Q: Are you clear what the roadmap is on LPG after the six cylinder quota. Seven cylinder onwards what are you free to charge and by how much does your under recovery come down on that aspect? A: Currently, the under recovery on LPG per cylinder is about Rs 350, so the price goes up by Rs 350 from the current Rs 400 per cylinder. It is not going to be very difficult for us to introduce and enforce this because this is across the customer population. There will be no differentiation; each customer will be given six cylinders on subsidized rate and the balance on the actual price. So, the price will go up to Rs 750 beyond six cylinders. Q: Now that the excise duty on petrol has been cut would you need to revise petrol prices higher? A: I do not think so because we were losing about Rs 6 per litre and the excise duty cut will bring about Rs 5.30 paise per litre. So it’s almost balanced. I do not think there is any need of increase in petrol price as of now.