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State run Oil marketing companies have told the Oil Ministry that they would not issue new LPG connections, owing to revenue loss on sales this year. The new move has been implemented since Thursday, May 15, 2008 and will limit the number of refills for existing connections to avoid further losses. A top official revealed that marketing directors of Indian Oil, Hindustan Petroleum and Bharat Petroleum in a joint petition to the Petroleum Ministry suggested cost-cutting measures as their losses on sales of kerosene, petrol, LPG and diesel mounted to over Rs 550 crore a day.
An Oil company executive revealed that the Oil Companies are borrowing Rs 3500 crore per month to keep their operations. The borrowings for the three major Oil firms have reached about Rs 65,000 crore. Last year the revenue loss the three firms faced was of Rs 77,304.50 crore, which is likely to turn Rs 200, 000 crore in the current year. A quota per family will be fixed and expansion of retail network will also be put on hold. Stopping new LPG (cooking gas) connections will also aid the oil firms to limit the Rs 305.90 per cylinder loss.
