PSU oil companies to seek fiscal relief of over Rs 22,000 crore for petrol and diesel losses

State owned oil companies will seek over Rs 22,000 crore relief for petrol, diesel losses from the government, sources told CNBC-TV18. The government owned oil companies incurred Rs 21,000 crore loss in the first half of fiscal year 2023.

The sources added that the government may study oil companies demand but the headroom for relief is limited, deregulated petrol and diesel makes direct relief tough. The current cash loss of PSU oil companies have lowered on softening crude oil. Petrol and diesel prices have been frozen since April 6.

India's largest oil PSU, Indian Oil Corporation reported a net loss of Rs 272.3 crore in the second quarter of the current fiscal, down from a net loss of Rs 1,992 crore in the June quarter.

Earlier this year, the Union Cabinet had approved a one-time compensation to oil marketing companies on LPG cooking gas to help them tide over the gap as a result of under-recoveries on LPG. Under recoveries is the gap between the cost and the selling price of fuel. In case the selling price is lower than the cost price, higher is the under recoveries.