New Delhi: Union Petroleum Minister Hardeep Singh Puri Tuesday ruled out any imminent hike in petrol or diesel prices but added a note of caution—if the West Asia conflict is prolonged and oil prices continue to spiral globally, Indian OMCs can see approximately Rs $28 million of their profit from last year wiped out this quarter.
“I mean, there have been times when the oil companies have done exceptionally well till recently. But, the rate at which we’re going, this one quarter of losses may wipe out the entire profit after tax of last year, which was about $28 million or something,” Puri said, addressing the CII Annual Business Summit.The minister added, “We don’t know how long this will take (the ongoing West Asia conflict)… if you look at the fiscal situation, if you look at the fact that my oil companies are losing Rs 1,000 crore every day, that the under-recovery is going to be nearly Rs 2 lakh crore…how long can you keep it like this? Oil prices used to be at around $64 or $65 a barrel. It has gone up to $115….”
The under-recoveries on petrol, diesel and LPG, Puri said, has touched approximately Rs 1.98 lakh crore.He added that it is in this context that he thinks PM Narendra Modi’s appeal, urging citizens to use fuel judiciously and make responsible lifestyle choices, is visionary. “The PM is saying that look, if this continues, you have to start thinking in terms of measures that will require to be taken to lessen the fiscal strain. That’s the point. I have been a trade negotiator, you use terms in the context of climate change negotiation, mitigation and adaptation but the time has come for us to also look at those things.”At the same time, Puri reiterated that there is no cause for anxiety and India has more than enough stock of crude oil, LNG and LPG. “Let me tell you categorically, we have no supply side problems…we have 60 days of LNG and we have 45 days of LPG. So there’s no problem on the supply side. So why this panic since yesterday or a day-and-a-half? Today, the country has more than enough stocks of crude oil. LNG and LPG. When this crisis began, there were some concerns, but we converted the challenge into an opportunity.”The minister said that India has ramped up its domestic production of LPG, which used to be 36,000 metric tonnes per day to 54,000 metric tonnes per day. “During this crisis, our energy consumption has actually gone up. If I looked at some statistics that my colleagues gave me yesterday, petrol consumption has gone up by 6 percent. In this crisis, there have been no shortcuts anywhere, no dryouts.”
