NEW DELHI: India has been able to ensure energy security and affordability largely because of the government-owned oil marketing companies (OMCs), which have behaved like good corporate citizens, Union petroleum minister Hardeep Singh Puri said here on Thursday.
His high praise for the PSU OMCs came at The New Indian Express’ Delhi Dialogues event, when he compared the energy situation globally with that of India. Puri, who is known for his candid views one remembers his CNN interview where he had said India has no qualms in buying oil from Russia also dispelled the myth that PSU refiners had failed to take advantage of the cheap Russian oil while private refiners cornered most of it.
He said the PSU OMCs did make high refining margins by buying Russian oil, but sold the oil at a loss in the domestic market, unlike private refiners who exported most of it. As a result, the PSU refiners reported Rs 21,000 crore loss in the first half of the financial year, so much so that the government has to give them a relief package of Rs 22,000 crore. He added that PSU refiners increased their purchase from Russia to one million barrels a day, as compared to private refiners buying 700,000 barrels a day.
The minister’s appreciation for PSU OMCs was also reflected in his views on the proposed disinvestment of Bharat Petroleum Corporation Ltd (BPCL), one of the government-owned refiners. He said: “It is a major contributor to our economy. So, there is no plan (for selling BPCL) just now… our experience of the last two years shows that BPCL is performing excellently and we need this entity.” Since BPCL is one of the most successful companies, there is no need for it to be sold, he added.
On the relief package for private fuel retailers, the minister said the companies have sought it. “I hope you know as there are under recoveries … our OMCs are borrowing the money left, right and centre, we will do our best to cushion them. Talks are going on,” informed Puri.
When asked how long the government would levy windfall gains tax on exports of petroleum products, he said that there was a reason for the windfall tax imposed on the oil companies, and it will continue till the objective is achieved. “The government doesn’t want any entity, whether it is private or public sector, to get unintended windfall profits,” he said.