New Delhi: Oil companies have sent ultimatum to the government that if they are not permitted to hike the petrol prices, they can put curtains on selling petrol in the country. Oil companies’ debt is so high that they were left with no other option but to hike petrol prices. Though, the oil companies have been given autonomy to decide on the petrol prices but are not being allowed to take decision on raising fuel prices. Oil companies are accounting a loss of more than Rs 7 per liter on petrol.

IOC head R S Butola has said that situation is getting worse. We are not in position to buy oil. Oil companies are incurring a loss of Rs 7.67 per liter on petrol. If sales tax is imposed on petrol, the price of petrol will go up by Rs 9.20 in Delhi.

Butola has said that on one hand the Central and state governments are earning big buck by imposing taxes, but the oil companies are not being allowed to make profits. Out of the total cost, 93 percent goes in purchase of crude oil. Indian Oil, Hindustan Petroleum and Bharat Petroleum incur a cumulative loss of Rs 48 crore everyday.  

It is noted that heavy tax is imposed on petrol. The Central Government earns Rs 14.78 as excise duty on every liter of petrol. State governments impose 25 percent VAT. Almost 50 percent of the retail price of petrol goes into government’s account. Butola has said that the government is not supporting in covering losses. 

However, the Central Government had given permission to raise petrol prices in June 2011. Oil companies used this freedom till December 2011 but the government imposed veto afterwards seeing the assembly election in four states. During the period, crude prices were between USD 110-125 per barrel. Oil companies incurred a loss of Rs 4,500 crore on petrol in 2011-12. But the government refused to extend any help. However, oil companies have been given Rs 45,000 crore for the losses incurred on diesel, LPG and Kerosene.