The so-called decontrol of petrol prices has added to government-owned oil companies' troubles. That's because they are not compensated for the losses they sustain from selling petrol at subsidised rates - that are actually mandated by the government.
Why? Because, the government argues, petrol prices are technically decontrolled! But now, the burden of selling petrol below cost is telling on these companies' bottomlines, adding to the under-recoveries from diesel and cooking fuel. So much so that chief executives are now willing to talk freely on this subject, a major change from their earlier reticence.
At the IndianOil press conference, for example, Chairman R S Butola pre-empted all questions on petrol under-recoveries by volunteering information on the issue and suggesting that prices needed to be raised by Rs 3 a litre.