Non-refund of retail losses may push NRL into red

An NRL official said that if the government allows such huge losses to continue, they may even outstrip the profit generated from the refinery, making the company economically unviable. “To prevent such a situation, NRL now has no option but to consider increasing retail prices of petrol and diesel, to at least partially reduce its retail marketing losses,” he added.

Crude oil prices have registered a massive rise over the past year. The price NRL pays has gone up from $68.66 per barrel in April 2007 to $111.94 per barrel in April 2008, with the rising trend continuing. “While this amounts to an increase of around Rs 11 per litre in the crude price, the increase in retail selling price has been only marginal to the tune of Rs 2 per litre for petrol and Re 1 per litre for diesel effected in February 2008. This has resulted in huge losses for companies engaged in petroleum retailing,” the NRL official observed. The current loss for the industry is around Rs 14 per litre for petrol and Rs 21 per litre for diesel.