State-run Indian Oil Corp said petrol prices need to be raised as revenue losses from selling the fuel at government controlled rates have widened more than seven-fold this month, head of finance PK Goyal said on Tuesday.
Revenue losses on petrol sales now stand at about three rupees compared to about 0.41 rupees a litre in the fortnight ending Aug. 31 due to an increase in Singapore spot prices of the fuel, he said.
"There is scope to raise petrol prices," Goyal told Reuters in an interview on the sidelines of the Asia Pacific Petroleum Conference (APPEC). "In the last fortnight (ending Aug. 31), our revenue loss was 41 paise a litre. It has now risen to about three rupees."
State-run firms last raised petrol prices in mid-May by a record. The increase of 5 rupees a litre made the fuel costlier than in the world's biggest oil consumer United States, hurting local consumption. Slowing car sales in Asia's third-biggest economy has also curbed sales.
The government last year gave state-run firms permission to fix gasoline prices on their own, while retaining control over diesel, kerosene and cooking gas to protect the poor and tame stubbornly high inflation. Still, these companies need a nod from the government to increase gasoline prices.
State-run retailers get cash subsidy from the government and discount on crude and products purchased from state-run upstream firms to partly offset the losses.
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