Chandigarh, May 18
The common man residing in major cities across India will now have to pay Rs 1.25 per litre more for diesel and Rs 3 per litre more for petrol, as only premium fuels will be available at all fuel retail outlets in cities.

Mounting losses by public sector oil companies in the wake of increasing price of crude oil has forced them to take a decision to sell only premium fuel (high performance petrol and diesel mixed with additives) at all petrol pumps within municipal limits of major cities across India. Sources said the three main oil companies — IOC, Bharat Petroleum and Hindustan Petroleum — have already taken a decision in this regard and a joint committee of the three oil companies is expected to meet this week to decide on the date of implementation.

Sources said while the oil companies have already started selling premium fuels at select outlets in the metros, retail outlets within the municipal limits of all big cities will now be exclusively selling premium fuels. “This is one of the means to control the daily retail losses being suffered by the oil PSUs in wake of the rising prices of crude.

While the crude oil prices have gone up to $ 125 a barrel, and are expected to go up to $ 150 a barrel, the government has not given nod for a hike in fuel prices. As a result, the three main oil companies are suffering a loss of Rs 500 crore a day, with IndianOil alone suffering a loss of Rs 300 crore a day,” said a top IOC official.

However, oil companies suffer less losses on their sale. Official sources said a decision to sell only premium fuels at retail outlets in cities is based on the rising consumption of these fuels, which have increased by 89 per cent in 2007-08. The sale of premium fuels contributed to almost 35 per cent of total sale by the three oil companies in the last fiscal year.

Over the past week, the oil PSUs have been deliberating on bringing down losses. Measures like not releasing new LPG connections, stopping all double bottle LPG connections and also stopping new dealerships. Though this has not gone down well with the government and the masses, the oil companies have stuck to the stand.

However, the petrol dealers are up in arms against the decision. Says J. P. Khanna, president of the Punjab Petroleum Dealers Association, “We will resist the move as the dealers in urban areas are already suffering huge losses.

As petrol and diesel in urban areas is already expensive (because of local taxes), we have been losing out on business to retail outlets in rural areas. This decision to allow sale of only premium fuels in urban areas will completely ruin our business”.