State-owned oil firms are losing Rs 450 crore per day on sale of diesel and cooking fuels as fall in rupee and rise in international oil prices has widened fuel losses.
Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) sell diesel, domestic cooking gas (LPG) and kerosene for PDS sales at government-controlled rates which are way below cost.
The oil firms have seen losses on diesel sales widen to Rs 15.55 per litre this fortnight from Rs 13.65 a litre they were losing in the first half of August, official sources said. Besides, they are losing Rs 29.97 a litre on kerosene and Rs 231 on sale of every 14.2-kg LPG cylinder.
The losses are besides close to Rs 3.8 per litre loss on the sale of petrol, a commodity which was deregulated in June 2010 but whose rates haven’t moved in tandem with cost because of government’s aim to keep inflation under check.
Losses on diesel, the most consumed fuel in the country, have soared to Rs 305 crore per day from about Rs 275 crore, they said, adding that at current rate the three firms may end the fiscal with a record revenue loss of Rs 167,468 crore.
The revenue loss this fiscal is compared to Rs 138,541 crore of under-recovery on fuel sales in 2011-12. Of this, the government made good Rs 83,500 crore by way of cash subsidy while another Rs 55,000 crore was provided by oil and gas producers ONGC, OIL and GAIL.
Sources said IOC, BPCL and HPCL lost Rs 47,811 crore on sale of the three controlled products during the April-June quarter. Of this, about Rs 15,000 crore was made good by upstream companies like Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL). The remaining was to be compensated by the government by way of cash subsidy but that hasn’t come so far.
In absence of the government subsidy support, IOC reported the highest quarterly net loss by any Indian company at Rs 22,451 crore. HPCL posted Rs 9,249 crore net loss in April-June while BPCL reported a net loss of Rs 8,836 crore.
Sources said the oil firm losses on diesel and cooking fuel are down from a record Rs 670 crore per day at the beginning of the fiscal as oil cooled off from highs of $120 per barrel. At the beginning of the fiscal, oil firms lost Rs 16.16 per litre on diesel sales, Rs 32.06 per litre on kerosene and Rs 570.50 per LPG cylinder.
The three companies calculate the desired retail selling price of diesel on 1st and 16th of every month based on the average price of its international benchmark. LPG and kerosene rates are calculated on a monthly average on 1st of every month.