Page 16 - June2018

CoverStory

ceding fiscal year. The HPCL, another state-owned The IOC’s profits have jumped more than four times
OMC, recorded a drop of 4 per cent in its March since the financial year 2015. During 2017-18, IOC’s
quarter profit, the overall FY18 net profit was net profit was at an all-time high of 21,346 crore on
highest ever for the company at 6,357 crore. a turnover of 5.06 lakh crore. Though the govern-
The profits for the financial year 2017-18 have ment-owned Bharat Petroleum Corporation Limited
more than double from what HPCL made in or BPCL is yet to announce its quarterly earnings, its
2014-15, the same year when PM Narendra Modi profit after tax had shot up to 8039 crore in 2016-17
became the Prime Minister. from 5085 crore in 2014-15. Perhaps a part of this bo-
For Indian Oil Corporation, India’s largest compa- nanza could be due to the new refineries which are
ny by revenue, the windfall is even more staggering. way more efficient. Also, with rising consumption of
fuel, the volumes or the overall refining capacity of
OMCs have gone up. To meet the rising demand, the
Petrol and diesel Price IOC alone is planning to invest 70,000 crore to raise
in diFFerent cities its oil refining capacity by about a quarter by 2030.

New Delhi: 77.96 68.97 Future is bleak
However, the current situation appears bleak for oil
producing firms. With global crude oil prices hover-
MuMbai: 85.77 73.58 ing around $80 a barrel this year, state-run upstream
companies like ONGC and Oil India Ltd (OIL) are fear-
CheNNai: 80.94 72.97 ing a possible return of under-recovery sharing sys-
tem as the Modi government looks for ways to placate
fuming middle class ahead of 2019 Lok Sabha elec-
KolKata: 80.60 71.66 tions. Petrol and diesel prices continue to soar and
touched another peak when petrol was hiked by 36
luCKNow: 77.86 68.53 paise to 85.65 per litre in Mumbai. This was the 12th
straight hike in a row. Diesel prices, on the other hand,
ChaNDigarh: 74.26 66.40 were hiked by 24 paise to 73.20 per litre in Mumbai.
Petrol prices in Delhi were increased by 36 paise to
77.83 per litre and diesel by 22 paise to 68.75 per
beNgaluru: 78.47 69.55 litre. Petrol prices have risen by 11.02 while diesel
has risen by 7.27 in the past 12 days in Mumbai. As for
Brent crude futures, the international benchmark for
ShiMla: 77.37 68.01 oil prices traded at $78.76 a barrel on the ICE.

guwahati: 79.38 71.38 the way out

According to Moody’s Investors Service, ONGC and
PaNjiM: 71.15 69.59 OIL could be asked to bear a part of government’s
fuel subsidy for oil, if prices stay above $60 per
barrel for the fiscal year ending March 2019. The credit
SriNagar: 81.61 71.76 rating agency added that the government is unlikely
to reverse fuel pricing deregulation because of its
thiruvaNaNthaPuraM: 81.36 74.20 commitment to reforms.
“States have the capacity and must reduce the
duty on petrol, while the Centre should create fiscal
bhoPal: 82.82 71.97 space to deal with the impact of spurt in oil prices,
There is merit in reducing the duties but both by
jaiPur: 79.97 72.81 the states and the Centre. More so for the states as
they tax the oil on ad valorem basis ... So states can
take that cut much more and better than the Union
DehraDuN: 78.38 68.71 government,” according to NITI Aayog vice-chairman
Rajiv Kumar.
He further said that it is important for them (states)
to agree 10-15 per cent duty cut and take home the
petrol Diesel *Figures in rupees same amount of tax revenue as budgeted. “Not doing

tehelka / 15 june 2018 16 www.tehelka.com

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