State-run Oil Marketing Companies (OMCs) expect Rs 50,000 crore cash compensation from the government for the financial year 2023-24, industry sources told CNBC-TV18.
The OMCs seek the compensation on grounds of freeze in retail prices of petrol and diesel in 2022 despite a steep rise in crude prices. There was no response from the government so far.
The state-run OMCs — Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL), and Bharat Petroleum Corporation Limited (BPCL) — suffered cumulative losses of Rs 3,805.73 crore in the first half of the financial year 2022-23.
The demand for compensation is to make up for the losses on fuel sale incurred by the companies in the first half of the current financial year, according to the sources.
CNBC reported that OMC sources said they need the compensation as they “Can’t be just above water, in survival mode.”
On October 12, the Union Cabinet had approved a one-time grant of Rs 22,000 crore to the OMCs for losses incurred in liquefied petroleum gas (LPG) sale.
The public sector oil companies also expect an immediate Rs 2-3 hike on diesel prices as they are still recording under-recovery in diesel.
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 in 2022, they had to keep prices unchanged despite a rally in crude oil prices to help keep inflation in check, which eventually dented their bottomline.
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