Indian Oil losing big due to subsidized oil prices

Indian Oil losing big due to subsidized oil prices

The effect of the rising fuel prices around the world is having its effect on the Indian Oil Corporation. As per incoming reports, they are losing as much as Rs 100 crore a day in under-recoveries on petrol and diesel.

The price of the crude oil was hovering around a record $75.17 a barrel during the weekend in the markets. The company’s under recoveries are projected at Rs 1,400 crore in the second fortnight of April. Add to that the under-recovery of Rs 1,000 crore in the first fortnight.

IOC is now being forced to raise over Rs 1,500 crore short-term borrowing in April. The company said in a statement: “We are expecting the Government to come out with a transparent mechanism to help oil companies to survive the crude price volatility by the middle of May.”

They are further planning to raise over Rs 3,500 crore by off-loading the first tranche of its 9.6 per cent equity holding in ONGC shortly. The company recently asked the government to soon raise the prices of petrol and diesel substantially in the near future.