Winning Bizness Desk

Mumbai. The country's three state-owned oil companies Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) have incurred a total loss of Rs 2748.66 crore in the July-September quarter. According to the oil companies, they are facing this loss due to non-increase in the prices of petrol, diesel and domestic LPG. According to the data released by the companies, IOCL has incurred a loss of Rs 272 crore in the September quarter, which was Rs 1995 crore in the previous quarter. On the other hand, HPCL has reported a loss of Rs 2172 crore, which was a record Rs 10196 crore in the June quarter. BPCL's loss in the second quarter was Rs 304 crore, in the first quarter this loss was Rs 6263 crore.

Companies selling oil at loss

For the past several months, crude oil has remained close to $ 100 per barrel, but the prices of petrol and diesel at retail pumps were around $ 85-86 per barrel. This hurt the financial health of companies. The government had said in the past that oil companies are free to revise retail prices. However, the three state-owned oil companies have not given details about the reasons for freezing the rates. Last month, while giving relief to the oil companies, the central government had announced a big bonus. Till date, an allocation of Rs 22,000 crore was approved to the state-run oil marketing companies to compensate for the loss of LPG. Then the government had said that these companies are incurring loss by selling LPG gas below the market rate, so the government is giving them relief by giving this subsidy.

How are the prices of petrol and diesel determined?

Till June 2010, the government used to fix the price of petrol and it was changed every 15 days. After 26 June 2010, the government left it to the oil companies to decide the price of petrol. Similarly, till October 2014, the price of diesel was also fixed by the government, but from October 19, 2014, the government handed over this work to the oil companies.

Petrol-diesel prices break in elections

According to experts, the government may deny its role in setting the price of petrol and diesel, but in the past years it has been seen that the government does not increase the price of petrol and diesel during elections to please the public. The trend of the last few years is telling that in the election season, the public has got relief from the increased prices of petrol and diesel.