State-owned oil companies have seen losses on diesel and cooking fuels drop by over 28% following a decline in international oil rates.
Oil PSUs, which at the beginning of the fiscal were losing Rs 670 crore per day on selling diesel, domestic cooking gas LPG and kerosene at government controlled rates, are now losing Rs 480 crore a day, industry sources said.
Losses on diesel, the most consumed fuel in the country, have come down from a record Rs 16.16 a litre to Rs 14.09 per litre. Losses on kerosene however are at lmost unchanged at Rs 32.06 per litre but those on domestic LPG has declined from Rs 570.50 per 14.2-kg cylinder to Rs 396.
Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum 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.
Sources said the three firms are projected to lose Rs 1,78,498 crore in revenue this fiscal, down from Rs 2,08,059 crore loss estimated at the beginning of the fiscal.
Oil Ministry has been seeking a meeting of a high-powered ministerial panel to revise rates of diesel, domestic LPG and kerosene for the first time in a year.
In addition, the decline in international oil rates have meant that oil firms are making a profit of close to Rs 1.46 a litre on petrol, a commodity which was deregulated by the government in June 2010.
The oil firms had last week hiked petrol price by a steep Rs 7.54 per litre. The hike was done considering an average gasoline price of $124.37 per barrel and a rupee-dollar exchange rate of Rs 53.17 in the first fortnight of May.
Gasoline price have since fallen to $115.77 per barrel in the second fortnight but rupee-dollar rate has worsened to Rs 54.96 to a US dollar during the period.
This average means that oil firms are making a profit of Rs 1.46 per litre at the current selling price of petrol of Rs 73.18 per litre in Delhi.
Sources said the three oil firms had in 2011-12 fiscal lost Rs 1,38,541 crore on selling diesel, domestic LPG and kerosene at government-controlled rates that were way lower than market price.
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.