The public sector oil companies — Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum — may suffer a Rs 25,000 crore revenue loss on fuel sales this fiscal, said S Behuria, chairman and managing director, IOC.
“At current crude prices, the oil marketing companies’ loss is Rs 75 crore a day. By the end of the current fiscal, under-recovery (revenue loss) could be around Rs 25,000 crore,” he said at the sidelines of the Chennai Petroleum Corporation Ltd’s (CPCL’s) annual general meeting on Monday.
IOC, BPCL and HPCL incurred a revenue loss of Rs 1.03 lakh crore on sale of petroleum fuel in 2008-09.
The global rise in crude oil prices will increase the under-recoveries for PSUs on sale of fuel at controlled prices. The high volatility in the rupee will add to it. According to CPCL’s annual report, crude oil import by India rose to 128.15 million tonnes in 2009-09, an increase of six per cent over the previous year.
CPCL’s annual report for 2008-09 says the year saw extreme swings in crude oil prices, with an unprecedented rise in the oil price till July 2008, followed by a rapid fall between August and December 2008. The PSU companies in the country faced the major brunt of this swing, due to the product pricing structure in the country.
The price of Brent crude reached $144 a barrel in July 2008 and dropped to $36.5 a barrel in December. Similarly, the Indian crude basket dropped from $147 a barrel to $35.8 a barrel.
The report also said overall growth in sales of petroleum products in India in 2008-09 was 4.5 per cent higher than the previous year.