New Delhi [India], May 8 : Oil marketing companies are facing an average monthly under-recovery of around Rs 30,000 crore on petrol, diesel and LPG sales amid rising global energy prices, even as the government continues efforts to shield consumers from price hikes, a senior Petroleum Ministry official said on Friday.
Addressing an inter-ministerial briefing here, Sujata Sharma, Joint Secretary (Marketing & Oil Refinery) in the Ministry of Petroleum and Natural Gas, said, "Our oil marketing companies are buying expensive raw oil, gas and LPG from the market. But to protect our consumers, they are selling at low prices."
"Now this has an impact on our Oil Marketing Companies as well. And to reduce this impact, the Indian government has reduced excise duty. And the cost of this reduction is Rs 14,000 crores per month," Sharma said.
She further said that oil marketing companies were facing "under-recovery, whether it is petrol, diesel or LPG."
The remarks come at a time when crude oil prices have surged sharply due to geopolitical tensions and disruptions in global energy supply routes.
"There is price volatility in international market," Sharma said, adding that "Crude prices increased to USD 120/barrel from USD 70."
Calling the Strait of Hormuz situation "the largest ever disruption", Sharma said India was continuing efforts to ensure uninterrupted fuel supplies and stable prices in the domestic market.
"Despite all this, I would say that the Indian government is trying to keep the price stable. And no price increase has been made yet," she said.
On LPG supplies, Sharma said the government was prioritising domestic consumers, and there was "no dryout at any LPG distributors."
"In the last 2 days, we provided 97 lakh LPG cylinders to consumers," she said, adding that "1.11 lakh 5 kg FTL have been sold in last 2 days."
The official also said fertiliser plants were receiving almost full fuel allocation despite supply pressures.
"Fertiliser plants are getting allocation of 98 per cent of the average consumption of the last 6 months," she said.
On city gas distribution, Sharma said demand for piped natural gas (PNG) connections remained strong.
"7 lakh people registered for PNG connection," she said, adding that "50,400 PNG consumer surrendered their domestic LPG cylinders."
Rejecting concerns over fuel shortages, Sharma said, "There is no rationing, no shortage of petrol and diesel," while adding that "Refineries are operating at their optimum capacity."
The ministry also said strict monitoring was underway to prevent hoarding and black marketing of fuel and LPG cylinders.
"There is a check on hoarding and black marketing," Sharma said, adding that "200 surprise inspection done yesterday."
She further said, "41 distributors have been issued a show cause notice, 12 distributors have been penalised, 1 distributor suspended."