The public sector oil marketing companies (OMCs) are making profits by selling oil and petroleum products to consumers, contrary to the perception that they are selling oil at a loss.
The gain, which could easily have been passed on to retail consumers, has been estimated to be around Rs 50,000 crore in five years between 2007 and 2012.
This has been the findings of the Comptroller and Auditor General (CAG) in its latest audit report on pricing of petroleum products. The report has been submitted to the government and is likely to be tabled in Parliament in the forthcoming Budget session.
The estimated gain to the government is at least Rs 25,000 crore in profits through the sales at petrol pumps and another gain of similar amount by way of customs duty and other charges added to the sale price of petrol and diesel.
On the contrary, the OMCs have been reporting ‘under recoveries’ to the tune of over Rs 1.10 lakh crore every year. The government auditor has observed that all these projected losses are notional due to flawed petroleum pricing. The CAG report is believed to have listed reasons how state-owned oil firms adopted a pricing formula that resulted in windfall gains to them and even some private refiners.
Sources said the CAG, in its report on pricing of petroleum products, has summarized that the public sector oil companies – Indian Oil, HPCL and BPCL – have made profits of over Rs 25,000 crore by selling oil to consumers and at least Rs 25,000 crore more have been added to the petrol pump prices due to levies and other charges imposed. The profit indicated is for the period between April 2007 and March 2012.
The federal auditor has explained how overpricing could have been avoided to give relief to the consumers.
The gain, which could easily have been passed on to retail consumers, has been estimated to be around Rs 50,000 crore in five years between 2007 and 2012.
This has been the findings of the Comptroller and Auditor General (CAG) in its latest audit report on pricing of petroleum products. The report has been submitted to the government and is likely to be tabled in Parliament in the forthcoming Budget session.
The estimated gain to the government is at least Rs 25,000 crore in profits through the sales at petrol pumps and another gain of similar amount by way of customs duty and other charges added to the sale price of petrol and diesel.
On the contrary, the OMCs have been reporting ‘under recoveries’ to the tune of over Rs 1.10 lakh crore every year. The government auditor has observed that all these projected losses are notional due to flawed petroleum pricing. The CAG report is believed to have listed reasons how state-owned oil firms adopted a pricing formula that resulted in windfall gains to them and even some private refiners.
Sources said the CAG, in its report on pricing of petroleum products, has summarized that the public sector oil companies – Indian Oil, HPCL and BPCL – have made profits of over Rs 25,000 crore by selling oil to consumers and at least Rs 25,000 crore more have been added to the petrol pump prices due to levies and other charges imposed. The profit indicated is for the period between April 2007 and March 2012.
The federal auditor has explained how overpricing could have been avoided to give relief to the consumers.
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