NEW DELHI: Cash-rich oil PSUs in India may soon go bankrupt if the government refuses to let these companies mark up domestic retail prices of petroleum products in line with global oil prices. The ministry of petroleum secretary has sent a letter to the Cabinet secretary saying if domestic oil prices are not hiked now, PSU oil companies like IBP could turn sick by September-end. With IBP already making losses, the firm?s net worth will be eroded enough for it to become a ?BIFR case? in a few months. It appears continuing losses on account of under recoveries by retail marketing companies will result in PSU oil firms going sick. Depending on the quantum of their equity and reserves, some like IBP will go sick in the near future. Others like BPCL and HPCL will take 12-15 months to go down under. The petroleum secretary has found it necessary to sound an alarm because the government still seems to be debating whether oil prices must be hiked. Worse, solutions like cutting customs duty on crude and petro products or issuing oil bonds to PSUs were bandied about as substitutes to hike prices. However, there is a growing realisation among ministries that oil prices have to be raised now. According to officials, the price of diesel has to be increased by over Rs five per liter and petrol by over Rs three per liter if they are to be market to the market. However, such a massive increase may not be feasible given the protest the Left parties are likely to kick up. But it is now accepted by all that some increase in prices of petro-products is inevitable if the oil marketing companies, mostly PSUs, are to be prevented from going completely into the red. On the present reckoning, PSU oil companies will have to share a subsidy burden of over $10 billion on an annualized basis, if prices are not corrected.