Wednesday saw the Petroleum and Natural Gas Minister Murli Doera ruling out a reduction in domestic fuel prices. In the past two months, there has been a continuous drop in the international crude oil prices and this has also brought the Indian crude basket by 8 percent.

Mr. Deora also informed the reporters, “The fall in prices of crude oil is a very positive and good sign. But … the Oil Marketing Companies (OMCs) are incurring massive losses due to under-recoveries at various levels.”

Last month, where the crude oil prices were high up to $147, this week it saw a downfall to around $ 113 a barrel.

The Minister expressed his concerns over the state of Indian Oil Corporation, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited, which still continue to lose money on fuel sales. He added, “There still are huge under-recoveries on sale of domestic fuel. I do not see how we can reduce retail prices when our companies continue to lose money… Our retail prices are pegged much lower [than current international crude prices]. There is no scope for reduction in petrol and diesel prices as of now.”

In June, the price of petrol was raised by Rs 5 litre and of diesel by Rs 3, whereas the domestic LPG prices were raised by Rs 50 by the government. The loss on sale of petrol, LPG, diesel, and kerosene was estimated at Rs 2,4,6000 crore for the full year at that time.

The revenue loss for IOC, BPCL and HPCL is estimated at Rs 2,05,740 crore even after the increase in price and cut in Customs and Excise duties.