Speculation about a possible petroleum price hike are rampant. Indian Oil Corporation (IOC) chairman Sarthak Behuria told the media in Chennai that a proposal to raise prices was under consideration of the union cabinet.

He said that public sector oil firms were losing a whopping Rs150 crore ($37 million) per day on the sale of petroleum products. IOC alone was losing Rs80 crore ($19.7 million) per day, Behuria said.

Oil companies were losing Rs2.81 (7¢) on each litre of petrol, Rs 4.68 (12¢) on each litre of diesel, Rs 16 (39¢) per litre on kerosene and Rs 120 ($3) on every cylinder of LPG, he told reporters in Chennai.

Behuria, who is also the chairman of the Chennai Petroleum Corporation (CPCL), said CPCL and IOC were planning to set up a Rs45,000 crore ($11 billion) grassroots refinery and petrochemicals complex at Ennore, in suburban Chennai. The chairman of the Tamil Nadu Industrial Development Corporation (TNIDC) heads a committee to identify 3,000 acres of land required for the project, he said.

Engineers India Ltd has been contracted to prepare the pre-feasibility study on the export oriented refinery project, and would hand over its report by the end of this month, he said.

Behuria presided over the Annual General Meeting of CPCL in Chennai. He said the company earned a record profit of Rs565 crore ($139 million), compared to Rs 481 crore ($118.50 million) the previous year. It handled 10.40 million tonnes of crude against 10.36 million tonnes in the previous year. The company declared a 120 per cent dividend for 2006-07.