NRL spokesperson Madhuchanda Adhikari said unlike the other PSUs like IOCL, BPCL, HPCL, the government would not provide any compensation package. "Last year our profit was Rs 569 crore, but because of high crude price and non-compensation, it has gone down this year to Rs 370 crores. At this rate we will wipe off all our profits" said Ms Adhikari.
She also informed that NRL marketing team have been working on and by tomorrow afternoon the exact enhanced price of per litre of petrol and disel will be notified. "This is a very hard decision. But the more we sell more we would make more losses," she said.
The NRL is a joint venture of BPCL, Oil India Limited (OIL) and the Assam Government. The 3 MMTPA Numaligarh Refinery Limited was dedicated to the nation by former Prime Minister Atal Bihari Vajpayee in July, 1999. NRL has been able to display creditable performance since commencement of commercial production in October, 2000.
'' There has been a phenomenal rise in crude price during the last one year and in case of NRL, the price has gone up from $68.66 per barrel FOB in April '07 to $111.94 per barrel FOB in April'08 and the prices continue to show rising trend. While this amounts to an increase of around Rs 11 per litre in the crude price, the increase in the Retail Selling Price has been only marginal to the tune of Rs 2 per litre in petrol and Re 1 per litre in diesel, brought into effect in February, 2008,'' Ms Adhikari said.
This has resulted in huge losses to companies engaged in petroleum retailing. The current loss for the industry as reported is around Rs 14 per litre for petrol and Rs 21 per litre for diesel, she said.
'' Moewover, NRL has not been given compensation against retail marketing losses which is available to the three public sector Oil Marketing Companies, namely IOCL, BPCL and HPCL in the form of discount in crude oil purchased from OIL and ONGC as well as Oil Bonds received from the Centre,'' she rued.
Due to non availability of any such compensation mechanism, the retail marketing losses of NRL have been mounting over the years and based on the current situation, if retail prices are not increased correspondingly, the retail marketing losses for NRL may go up to Rs. 400 to 500 crores, in the financial year 2008-09'' she said.
The NRL management apprehend that such huge losses, if it continued, may even outstrip the profit generated from the refinery thereby making NRL economically unviable.
''In order to prevent such a situation, NRL is being left with no alternative but to consider increase the retail prices of petrol and diesel, at least to partially reduce the retail marketing losses'' she said.
This is noteworthy that after successful commissioning of the refinery, NRL commenced production from 2000. Subsequently, NRL ventured into retail marketing from 2004. So far, NRL has set up 108 Retail Outlets in the country, majority of which is in the North East.