Post petrol price hike, under-recovery at Rs 5/L: BPCL

The government has done it again and this time in a much more harsh manner. Just a day after the election results of five state assemblies were announced, the government announced to hike petrol price by about Rs 5 per litre.

Despite the steep price hike, Bharat Petroleum is not happy. In an exclusive interview to CNBC-TV18, SK Joshi, Director of Finance, BPCL said that under-recovery is still worth Rs 5 per litre post petrol price hike. It has just fallen from Rs 10 per litre before the hike. This is important: EGoM to decide on diesel, LPG price hike next week Indian Oil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) have hiked rates between Rs 4.99 and Rs 5.01 per litre in Delhi with effect from Saturday midnight. The government had freed petrol price from government control in June but the state-owned oil firms had not raised prices on an ''informal'' dictate from the oil ministry. Below is the verbatim transcript of his interview with Udayan Mukherjee and Mitali Mukherjee of CNBC-TV18. Also watch the accompanying video. Q: Could you tell us what is the continuing under recovery on petrol even after the Rs 5 hike that you have undertaken from Sunday? A: The total shortfall was around Rs 10. We have covered Rs 5 and under recoveries of about Rs 5 still are there. Q: Could you also tell you whether you intend to bridge this gap further over the next ten days by raising petrol prices further possibly and also if you are expecting diesel prices to go up somewhat in the next 10 days? A: This is a tough decision because these are sharp increases which has happened in oil. Around January we steeply increased the prices almost Rs 3 and Rs 2.5 with a span of month then Middle East crises came and then crude ran away. We felt that it will come down but, it has not come down and again required a huge jump. We have done currently at Rs 5 and crude has substantially gone up. We are waiting for how crude is behaving because you have seen last week lot of volatility. So we will observe, wait and then take a call. Q: The finance minister indicated that when the EGoM meets they will discuss a potential Rs 4 increase in diesel. Is that the quantum that oil marketing companies asked for a) and b) what kind of under recoveries are you facing on diesel right now? A: Currently we are suffering around Rs 14.67 per litre for diesel, Rs 28.21 for kerosene and Rs 327 for LPG per cylinder. So, the under recoveries are very high and whatever price increase is, is welcome. Q: One clarification on petrol, are you still allowed to book this as an under recovery? For all practical purposes the government said this is a free fuel, right. So are you allowed to book it when you discuss your under recoveries? A: Yes, you are right. We have approached government. In June when the price deregulation happened for petrol, government said that if price goes up by abnormal they will revisit the issue. Of course officially, nothing has been done. But, always our price increases were with lag and we hope that sometime price will reverse. That has not happened. So this is a tough period. We have approached the government to give some relief because we are on the verge of closing the account for March