State-run Oil Marketing Companies (OMCs), HPCL, BPCL and Indian Oil Corporation are seeking compensation of as much as Rs 50,000 crore to cover up for the losses that they have incurred due to the freeze in fuel prices, industry sources told CNBC-TV18.

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Sources further said the companies are of the view that they can't just keep their head above water and remain in survival mode. The companies are demanding this compensation to make up for the losses incurred in the first half of the current financial year.

As an immediate measure, companies are of the view that diesel prices can be hiked by Rs 2-3 per litre, according to sources, who also said that the OMCs are currently making some loss on diesel and marginal gains on petrol.

However, there is no clarity yet on any further compensation to the companies from the government.

Indian Oil Corporation reported a net loss of Rs 2,265 crore for the April-September period of the current financial year while BPCL reported a net loss of Rs 6,567.2 crore for the same period. HPCL's net debt for the first half increased to Rs 68,600 crore. This, despite a one-time grant given to these companies by the government to compensate for the loss.

CNBC-TV18 had reported in October that OMCs mulled government intervention as they were weighed down by fuel under recoveries. Back then, sources had estimated the combined under recoveries for LPG and fuel to be worth over Rs 1 lakh crore.

Shares of HPCL, BPCL and Indian Oil Corporation are trading with gains between 2.7-5 percent in today's trading session. The stocks have gained over the last month as crude prices have corrected.

First Published:Jan 11, 2023 11:30 AM IST