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The Numaligarh Refinery Ltd (NRL) will
increase the prices of petrol and diesel at its retail outlets to
contend with the phenomenal rise in crude prices and the non-payment of
compensation by the Centre.
In case of the refinery, there has been
an unprecedented rise from $68.66 per barrel in April last year to
$111.94 per barrel this year.
“While this amounts to an increase of
around Rs 11 per litre in the crude price, the retail selling price has
increased only by Rs 2 per litre for petrol and Rs 1 per litre for
diesel, effected in February. This has resulted in huge losses to
companies engaged in petroleum retailing. The current loss for the
industry as reported is around Rs 14 per litre for petrol and Rs 21 per
litre for diesel,” a senior official said.
The increased prices will be notified shortly. However pressure is on to reverse the decision from
The official said the company is not
given compensation against retail marketing losses. The three public
sector companies — Indian Oil Corporation Ltd (IOCL), Bharat Petroleum
Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) —
receive compensation in the form of discounts in crude oil purchased
from OIL and ONGC as well as oil bonds received from the Centre.
“Because of the non-availability of any
such compensation mechanism, the retail marketing losses of NRL have
been mounting over the years and if retail prices are not increased
correspondingly, the losses for NRL may go up to Rs 400 to Rs 500 crore
in 2008-09,” the official said.
“The average sale of NRL retail outlets
was 256 kilo litre per month during the last financial year vis-à-vis
estimated industry average of around 140 kilo litre per month,” the
official added.
The official said such huge losses might
eventually render NRL economically non-viable. “In order to prevent
such a situation, NRL is left with no other alternative but to increase
the retail prices of petrol and diesel, at least to partially reduce
the retail marketing losses,” he added.
The company is talking to the dealers to
offer them a compensation package. “We agree that we will lose
customers but cannot also stop selling in order to keep running,” the
official said.
The idea behind setting up of retail
outlets was to create a distinct identity in petrol retailing through
innovation, world class infrastructure and services different from the
established market players.
PetrolWorld 150508
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