India hasn't seen the 'full flurry" of international oil price fluctuation of oil yet, and the price hike due to daily revisions will even out in the long run, M K Surana, chairman and managing director of Hindustan Petroleum Corporation Ltd (HPCL), said.
Speaking at the annual general meeting (AGM) of the company last week, Surana said the two recent cyclones in the US led to around 13% decline in supply, lifting the international oil prices and pushing up petrol price 18% and diesel 15% in India.
"Full flurry of international pricing impact has not been faced by India. In comparison, the domestic increase in price has been much less. It's not the highest price hike. The highest was in 2013," Surana said.
Commenting on the daily pricing of petrol and diesel since June, he said the intention for adopting this international practice is not to make more profit or less, as in the long run everything will even out.
"It has been done more to improve the efficiency in the system," Surana said. "Soon after the adoption of daily pricing formula, prices dropped for a few days. But nobody complained then."
Surana said the international prices of oil depend on different models and also on how it reaches India. Plus, there are government taxes, retailer commission and marketing margin which gets added to the final price for the consumer, he said.
The remarks by Surana comes at a time when the price hike on oil has become a political hot potato, with opposition parties making a hue and cry over it. In Mumbai, petrol and diesel prices touched Rs 79.59 and Rs 62.50 a litre, respectively on Saturday while in Delhi it stood at Rs 70.48 and Rs 58.84 per litre, respectively. However, in 2013 when the oil prices last touched Rs 70, crude prices hovered around $98 per barrel. They are now ruling at an average of $50 per barrel.
While there was a talk that the government may ask the public sector oil marketing companies to absorb some price, it did not happen. Also, petroleum minister Dharmendra Pradhan said the only way to make oil cheaper is by bringing it under the goods and services tax.
Meanwhile, the company said for the first time its profit after tax in a financial year crossed Rs 6,000 crore mark on a standalone basis to reach Rs 6,209 crore and Rs 8,000 crore mark on a consolidated basis to reach Rs 8,236 crore.
FLARING UP
- Daily pricing not intended to bring more or less profit
- However, this will improve system efficiency
- Petrol prices have risen 18%, diesel 15% after international crude price jump
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Commenting on the daily pricing of petrol and diesel since June, he said the intention for adopting this international practice is not to make more profit or less, as in the long run everything will even out.
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