RIL asks Govt to free fuel pricing

New Delhi, Jan 13 (PTI) Reliance Industries, which had
shut down all of its petrol pumps last year because of huge
losses, today asked the government to free retail fuel pricing
to provide a level-playing field to its Public Sector
Undertakings (PSU) competition.

The government should use only fiscal measures to
moderate retail rates in times of high international crude oil
prices and extend fuel subsidies, which are currently
available only to state-run firms, to private companies as
well, said P Raghavendran, President of Reliance's refinery
business.

"Removal of government controls is much more critical
than a simple statement that the private sector can come in,"
he said, adding, the company would reopen its outlets only
when it gets a level-playing field.

The Mukesh Ambani-run company had shut all of its 1,432
petrol pumps in March 2008 after it failed to compete with
public sector companies, who sold fuel at rates much lower
than their cost, as they got government subsidies.

However, with the fall in international oil prices,
margins on both petrol and diesel have turned positive.

State-run oil companies Indian Oil, Bharat Petroleum and
Hindustan Petroleum are making a neat profit of Rs 9.10 a
litre on petrol and Rs 3.70 per litre on diesel.

Essar Oil, the second-largest private fuel retailer, has
reopened about 1,000 petrol pumps since September, when
international crude oil prices began declining.

Raghavendran suspected that unless administrative
controls were dismantled, the government may again impose
price caps on petrol and diesel PSU retailers sell if the
international crude oil prices were to rise again.

Such caps, would again force the private sector
competition out. "Getting in and getting out frequently is not
viable for consumers and it is not viable (even) from the
company's point of view," he said.