Facts, not comments

The deregulation of petrol and fuel prices since 2010 coupled with dynamic fuel pricing introduced in 2017 has been pinching the hapless citizens of the country through ever rising fuel prices defying any rational explanation. But the other side of the picture is that the Oil Marketing Companies (OMCs) are one of the major beneficiaries of the dismal fuel price scenario.

In addition to pure marketing, the three big OMCs in the public sector – IOCL, HPCL and BPCL and a host of private sector players also refine and market oil that they buy from upstream oil exploration and production companies including ONGC, Oil India, Reliance Industries etc. Their purchase price is directly related to international crude price.

The 3 public sector OMCs have been consistently making huge profits over the years. All of them have a top heavy structure with astronomical numbers of top executives (Chief General Managers and above) with very high compensation packages. IOCL has 85 EDs and 138 CGMs. HPCL has 30 EDs and 63 CGM.  BPCL has 30 EDs and 61 CGMs.  Not surprisingly, the staff cost of all these OMCs is colossal, consuming a sizeable portion of their expenses, since the pay, perquisites and post-retirement benefits of their executives, officers and employees are phenomenally exorbitant and go on increasing. 

The fact is that OMCs are reaping huge profits, giving whopping returns to the Government and giving the best financial support, comforts, luxury and security to their employees, all at the cost of the poor citizens.  It is high time that the central government looked at the cost structure of the public sector OMCs and explore the possibilities of a cost rationalization in them, which could result in an easing of the fuel prices.  The point is that on the one side in spite of their stunningly employee compensation intensive pattern and top heavy structure, all the OMCs are making colossal profits, while on the other side the prices of fuel are skyrocketing making the common man gasp for breath.