The three retailers will once in a month "coordinate" on pricing of petrol based on international price trend of crude oil (the raw material used to make petrol) and gasoline
State-owned oil companies Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) today decided to have a uniform petrol price despite government giving them freedom to price the fuel and said they will revise prices once a month based on input cost, reports PTI.
The three retailers will once in a month "coordinate" on pricing of petrol based on international price trend of crude oil (the raw material used to make petrol) and gasoline, Indian Oil Corporation director (finance) S V Narasimhan said.
"All the three oil marketing companies will have uniform price," he said.
The decision to allow IOC, BPCL, and HPCL to function as 'informal' cartel was taken at a meeting called by oil secretary S Sundareshan. The meeting was called to decide on the modalities of how petrol will be priced after it was freed from the government control.
"Petrol price on 25th June were raised by Rs3.50 per litre following price decontrol instead of Rs3.73 a litre required to align them with cost," Mr Narasimhan said.
Subsequently, international oil prices declined, wiping away most of losses. "We have reviewed the situation and as of now there is no need for revise petrol prices," he said.
On 25th June, an Empowered Group of Ministers (EGoM) headed by finance minister Pranab Mukherjee had also decided to free diesel prices from government control but raised rates only by Rs2 per litre instead of Rs3.80 per litre required to align them with international cost.
The gap between retail selling price and international cost widened subsequently to Rs3.14 per litre from Rs1.80 a litre at the time of price hike. This has subsequently come down to Rs1.70-Rs1.80 per litre now.
"There is no decision or move to revise prices of diesel at this juncture," Mr Sundareshan said.
Mr Narasimhan said the oil companies do not feel the need for revising rates of petrol now and will review the situation possibly by the month end.
From now only, pump rates will be revised once a month.
The three companies will have a uniform rate for petrol in particular cities or locations, and it would change on the same dates.
"We will not announce dates of revision in advance to avoid hoarding of the fuel. We will revise prices on any day of the month," an official said.
Three PSUs have already held discussions with private retailers - Reliance Industries (RIL), Essar Oil and Royal Dutch/Shell - on modalities such as frequency and intervals at which prices would be revised.
Mr Sundareshan said he hoped the private sector rates would not be very different from PSU fixed prices.
Moneylife had reported on 6th May that Piramal Healthcare may be up for sale. The company was claiming that it was planning to acquire smaller labs for growth. Now it has been sold out to Super Religare Lab
Piramal Healthcare is set to sell off its diagnostics unit to Super Religare Laboratories (SRL). In a deal valued at around Rs600 crore, SRL will acquire controlling stake in Piramal Diagnostic Services Private Limited (PDSL), which provides pathology and radiology diagnostics services.
This development is completely contrary to the Piramal management’s earlier claims about acquiring smaller diagnostics laboratories around the country in the company’s bid for growth. Moneylife had earlier written (see: http://www.moneylife.in/article/8/4344.html) on how the PDSL management’s claim of acquisitions of 10 smaller pathology labs did not ring true.
We followed this up with another article (see: http://www.moneylife.in/article/8/5230.html), which highlighted the fact that the company had already shut down its diagnostics operations in Delhi, even as it was refuting rumours of its complete exit from the diagnostics space. Dr Swati Piramal, director, Piramal Healthcare had informed Moneylife, “We would like to clarify that the news appearing in certain sections of the media about the Piramal Group planning to close its diagnostics operations is completely baseless and untrue. We have expanded rapidly till 2009 and will continue to expand after consolidating and strengthening business processes.”
Moneylife’s stance on the issue now stands vindicated with confirmation that Piramal Healthcare has entered into an agreement for SRL to acquire its diagnostics business. This is in sharp contrast to the company’s earlier claims. It appears that this was part of the management’s carefully crafted strategy to give a wrong impression.
Interestingly, while PDSL was talking of acquisitions, the business was running at large losses for the past three years. The losses it incurred over the past three years are Rs3.54 crore (2007), which increased to Rs4.20 crore and Rs3.71 crore in 2008 and 2009, respectively.
Commenting on the sell-out, Ajay Piramal, chairman, Piramal Group told PTI, “We feel it is the right time to take the business to the next level and this development will give it the scale and size to serve a much larger base of Indian customers with a high level of quality and care.”
The complaint has been filed under sections 3 and 4 of the Competition Act, which pertains to anti-competitive agreement and abuse of dominant position, respectively
Reliance Industries (RIL) has moved the Competition Commission of India (CCI) alleging state-owned oil firms Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) have formed a cartel to supply aviation turbine fuel (ATF) to Air India, reports PTI.
According to official sources, RIL has filed a complaint stating that the government-owned oil marketing companies worked as a cartel while bidding for ATF supply to flag carrier Air India.
It is learnt that RIL wants to enter the business of jet fuel supply, which is in the hands state-owned oil marketing companies.
"The complaint has been filed under sections 3 and 4 of the Competition Act, which pertains to anti-competitive agreement and abuse of dominant position, respectively. The commission will consider the complaint by RIL in a week," a source said.
When contacted an RIL spokesperson said: "We do not wish to comment."
National Aviation Company of India (NACIL), that runs Air India, regularly floats tenders for supply of ATF.
RIL's move coincides with the widespread anticipation that the PSU oil firms will continue to act as a cartel while revising petrol prices every month in the free pricing regime, which looks set to kick in as early as this week.
Petrol prices were freed from government control last month, resulting in a Rs3.50 per litre rate hike in Delhi.
However, the modalities of subsequent retail price adjustments — in line with changes in crude — were left for the industry to decide.
Though diesel prices were raised by an ad-hoc Rs2 per litre, it continues to be under government control.
"It makes no sense for PSUs to compete among themselves if only petrol prices are being freed. Oil marketing companies (or state-run fuel retailers) will continue to coordinate on the pricing of petrol," said a top oil PSU executive.
IOC, BPCL and HPCL are likely to revise petrol prices every month on the basis of monthly average of crude oil prices.