(ET)
Refiners are seeking government support for their plan to raise consumer prices to recover heavy investments they have made in upgrading their facilities to produce less polluting Bharat Stage-VI fuel.
Refiners will need to recover an additional 80 paise a litre on petrol and Rs 1.45 a litre on diesel for five years for a decent return on their investments, according to industry executives.
State-run refiners, including Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Petroleum Corporation and Mangalore Refinery and Petrochemicals, have together spent about Rs 35,000 crore in upgrading their units for BS VI-compliant fuels, to meet the official target of supplying less polluting fuel across the country from April 1, 2020. Private refiners too have spent heavily on this.
“We all are trying to figure out the right mechanism but the principles remain the same that there is a substantial investment done by refineries and there has to be some kind of recovery of that cost. That is the representation to the ministry,” said B Anand, chief executive of Nayara Energy (formerly Essar Oil), which operates a 20 million tonnes a year refinery and sells 60% of its output in the domestic market.
