Government Holds Back on Fuel Subsidy Amid Rising Losses for Oil Companies
The Indian government will not extend financial support to state-owned oil companies facing losses from selling fuel below cost due to a prolonged price freeze. Companies like IOC, BPCL, and HPCL are incurring significant losses, but the government aims to protect consumers by avoiding retail price hikes.
In a recent announcement, the Indian government stated it has no plans to provide financial assistance to state-owned oil companies suffering from losses due to selling fuel at below-cost rates. The stance comes amidst a prolonged four-year freeze on retail fuel price adjustments, despite soaring crude oil costs.
Oil majors such as Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) are experiencing significant financial hits, with some posting losses on aviation turbine fuel (ATF) for the first time in over two decades. Nevertheless, the government remains firm on its decision not to increase consumer prices for petrol, diesel, and domestic LPG.
Joint Secretary in the Ministry of Petroleum and Natural Gas, Sujata Sharma, emphasized that consumer protection is a priority in the decision-making process. While commercial and industrial fuel prices have seen hikes to offset losses, the strategy is aimed at curbing inflation and safeguarding public interest.
(With inputs from agencies.)
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