Oil firms say no directive from govt to defer price hike

The government has not asked state-owned oil firms so far to avoid raising the retail price of petrol and diesel in view of next month’s elections in Karnataka, heads of IOC and HPCL said on Wednesday.

The government was said to have informally directed stateowned fuel retailers not to raise petrol and diesel prices in the runup to the December 2017 assembly elections in Gujarat. By some accounts, as much as 45 paisa increase warranted in petrol and diesel rates was not passed on.

This time around Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) have reportedly been asked to absorb up to Re 1 a litre hike.

“No, we haven’t heard from the government anything (on dropping daily price revision),” IOC Chairman Sanjiv Singh told reporters on sidelines of the IEF Ministerial meeting here.

HPCL Chairman and Managing Director M K Surana too said the company is not aware of any directive to oil companies not to pass on the rise in international oil prices.

Oil Minister Dharmendra Pradhan refused to take questions on government dictate that essentially would mean a reversal of reforms.

Shares of IOC fell as much as 7.6 percent after the news of government asking oil firms not to raise prices broke. HPCL lost as much 8.3 percent.

The government had in June 2010 freed petrol price from its control, and the diesel rates were deregulated in October 2014. Prices have since then moved more or less in tandem with international rates barring a few exceptions like the period before a crucial election.

State-owned oil companies in June last year dumped the 15-year old practice of revising rates on 1st and 16th of every month and instead adopted a dynamic daily price revision to instantly reflect changes in cost. Incidentally, oil companies did not change rates at their pumps on Wednesday.