Increasing Loss to Oil Companies

      Thanks to Assembly elections in four States and one Union Territory, oil companies have not increase the price of petrol which is despite free from government price control mechanism and one can understand why oil companies are not taking steps in this regards to lessen their financial loses’, until and unless there is sword hanging on to government of Assembly elections, oil companies will keep on reeling under the financial loses. Right now crude oil is hovering around 112.29 dollar per barrel at American market which is its highest level since September, 2008, hence Public domain Oil Companies are bearing huge loses on to the sale of every liter of diesel, kerosene sold at ration shops and on to sale of every domestic gas cylinder.
     Due to tension in western Asia and north Africa, speculation is looming of fear of disruption of supply, crude oil has touches highest level of its two and half years and Organisation of Petroleum Exporting Countries (OPEC) have not announce extraordinary meeting, both these factors support rise of crude oil, it is 123.99 dollar per barrel at London Brent Crude Oil Prices on 22nd April,2011 and 112.29 dollar per barrel at American markets, thus its impact can be seen in world’s other markets. In India as other then petrol all other petroleum products like diesel, kerosene sold at ration shops and domestic gas cylinder are still under government’s price control mechanism and government has not given any sign or take initiatives to increase the prices, even Public domain oil companies are not increasing prices of decontrol mechanism for government that is petrol, one can understand easily as due to assembly elections in the country. One government official of oil companies express his opinion on to the current situation, that public domain oil companies lose can touch 1.74 trillion rupees figure in the just started new financial year from April month, last financial year ended in the March on to sale of petroleum products that comes under government control price mechanism oil companies have registered revenue lose of 78,600 Crores rupees it include cash help from government of almost 21,000 Crores rupees. Public domain oil companies like Indian Oil Corporation, Hindustan Petroleum Corporations and Bharat Petroleum Corporation due to high crude price had lose of 1.74 trillion rupees and it will continue to rise as government is unable to show courage to increase the prices’. Even in the financial year 2008-09 oil companies had lose of 1 trillion rupees, which was compensate to then by government through releasing oil bonds as crude oil prices were touches 147 dollar mark. Right now oil companies are bearing lose on to sale of different petroleum products that are under the domain of government price control mechanism –

• Diesel – lose of 16.76 rupees on to sale of every liter.
• Kerosene Oil – 28.33 rupees on to sale of every liter at ration shops across country.
• Domestic Gas Cylinder – Rupees 315.86 on to sale of every cylinder.

Thanks to Assembly elections in the country that government has keep its eyes closed on to the movement of crude oil and not only allowing Public domain oil companies to bear the lose on to sale of petroleum products but also oil companies are unable to increase the price of petrol, but once the period of assembly elections over in the country then certainly public is going to feel the heat of price rise.