OMCs still making under-recovery on diesel sale: Hardeep Singh Puri

Oil Minister Hardeep Singh Puri (File image)

Union Minister of Oil and Natural Gas Hardeep Singh Puri on November 2 said the oil marketing companies (OMCs) are still making under-recovery on diesel sale when asked if there is a possibility of a price cut for retail fuel in line with the decline in crude oil prices.

Speaking to reporters at a press meet on November 2, Puri said the government ensured to keep prices low for the consumers even when the international prices were very high.

OMCs typically revise retail petrol and diesel prices daily, based on the rolling average of international benchmark prices over the past 15 days. But earlier this year, they left prices unchanged despite soaring crude oil prices, which has dented their bottomline.

State-run Indian Oil Corporation reported net loss in the second consecutive quarter last week. The company posted a net loss of Rs 272.35 crore for the July-September quarter against Rs 6,360 crore profit a year earlier. The other two OMCs, Hindustan Petroleum Corporation Ltd and Bharat Petroleum Corporation Ltd, are yet to announce results for the second quarter of FY23, but both reported losses in the first quarter weighed by auto fuel sales.

The OMCs have kept the prices unchanged despite record-high prices to keep inflation in check in the country.

Benchmark Brent crude oil prices have declined to under $95 a barrel from around $110 levels in end-July.

“Oil refiners don’t ask me where they source oil from, it is an independent commercial decision. Their effort is to buy the cheapest oil from wherever they can get it,” said Puri.

The minister added that the OMCs navigate the purchase of oil through both availability and affordability of energy.​

In an interview with CNN on November 1, Puri said that there was no moral conflict in buying Russian oil. He also said that the government has a moral duty to consumers and it has to ensure that consumers are supplied with energy.