Rising crude prices put pressure on oil marketing firms

Shares of three oil marketing companies fell between 0.89% to 2.61% on reports the Indian crude basket crossed crude basket crossed $100 a barrel mark for the first time on Monday, 10 March 2008.

BPCL fell 2.61% to Rs 432.30, HPCL declined 1.31% to Rs 283 and Indian Oil Corporation lost 0.89% to Rs 510.

The Indian crude basket closed at $100.17 a barrel on Monday, 10 March 2008, 29 cents up from Friday, 7 March 2008.

The international crude prices continued to soar on Tuesday 11 March 2008. US crude touched a high of $109.20 per barrel and London Brent $105.40 a barrel on Tuesday. Weak dollar and heightened speculative activity is pushing crude prices.

The Indian basket has averaged $98.46 a barrel in March 2008 as against the average of $92.37 per barrel last month. The current year average of the Indian basket was at $77.98 per barrel.

The volatility in crude prices is putting further pressure on fuel retailers, who are losing Rs 360 crore per day on petrol, diesel, cooking gas and kerosene, as they continue to sell products below the cost price.

Public sector oil marketing companies are losing Rs 9.68 a litre on petrol, Rs 12.21 per litre on diesel, Rs 20.95 per litre on kerosene and Rs 303.66 per 14.50-kilogram domestic LPG cylinder.

Despite increase in international oil prices, the Government has not increased prices of kerosene sold under the public distribution system and cooking gas. The Government has brought a marginal increase in petrol and diesel prices by Rs 2 per litre and Re 1 a litre respectively with effect from 15 February 2008.

The Minister of State in the Ministry of Petroleum and Natural Gas, Dinsha Patel, informed the Rajya Sabha that the Government was closely monitoring international oil prices and will continue to protect the interests of the consumer.