homebusiness Newscompanies NewsOil companies renew push for fuel price hike amid heavy losses, forex woes
Oil companies renew push for fuel price hike amid heavy losses, forex woes
Oil marketing companies IOC, HPCL and BPCL incurred huge losses in the quarter gone by as the rupee weakened, prompting them to make a fresh pitch to the government for an increase in fuel prices.
Oil marketing companies (OMCs) in India are pushing for a fuel price hike citing losses due to forex fluctuations and the depreciation of the rupee, which have put them under tremendous financial strain as the primary reasons for their request.
Sources told CNBC-TV18 that the losses incurred by the companies have prompted them to make a renewed pitch to the government for an increase in fuel prices.
The losses suffered by companies such as Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation Limited (HPCL) for the April to December period in FY23 were in excess of Rs 12,000 crore.
Additionally, the forex losses incurred by IOC and Bharat Petroleum Corporation Limited (BPCL) in the April-December period of FY23 are over Rs. 9,300 crore. This has put the companies in a difficult position, and they are looking to recover some of their losses by increasing fuel prices.
The sources added that the OMCs are still making losses on diesel despite some marginal profits in the third quarter of FY23.
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The companies are also facing pressure from a price freeze on petrol and diesel, as well as a windfall tax, which is eroding their margins. The windfall tax was imposed in the wake of rising crude oil prices, and it has been impacting the OMCs' profitability.
The situation is not ideal for the companies, and they are looking for a way to recoup their losses. As per sources, the OMCs are relying on other businesses to recover some of their losses, but this is not a sustainable solution in the long term.
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(Edited by : Shoma Bhattacharjee)
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