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| Diesel ceases to earn profit for state oil firms |
| Press Trust of India / New Delhi Jun 01, 2009, 14:24 IST |
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State-run oil firms Indian Oil, Bharat Petroleum and Hindustan Petroleum are no longer making profit on diesel sales and for the first time in six months they are losing money on the sale of all auto and cooking fuels due to rising international oil rates.
The firms were till last month selling diesel at a profit of 32 paise a litre, which helped them partly neutralise the losses on the sale of petrol, domestic LPG and kerosene.
But from today, IOC, BPCL and HPCL are at breakeven on diesel while they lose Rs 3.68 a litre on petrol, Rs 69.49 per 14.2-kg LPG cylinder and Rs 12.65 on every litre of kerosene, industry sources said.
If auto prices are deregulated, as is being speculated, petrol prices will rise by Rs 3.68 a litre.
Since November, the three had been making profit on the sale of diesel — the margin being as high as Rs 6.19 a litre in the first fortnight of March. On petrol, they made profit till the second fortnight of March and losses thereafter.
However, the rising global crude oil prices, which touched $68 a barrel last week, have eroded the margins and the three firms are now losing Rs 72 crore per day on fuel sales, sources said.
For the 2009-10 fiscal, the three firms, which calculate desired retail end prices on the 1st and 16th of every month based on the average of previous fortnight, are estimated to lose Rs 22,650 crore on fuel sales.
Sources said IOC, BPCL and HPCL are currently losing about Rs 15 crore per day on sale of petrol, Rs 48 crore on kerosene and Rs 11 crore on domestic LPG.
Till yesterday, the three firms were making a profit of 32 paise a litre on diesel. They, however, lost Rs 1.99 per litre on petrol, Rs 12.27 a litre on diesel and Rs 91.51 per domestic LPG cylinder.
IOC, BPCL and HPCL take fortnightly averages of international oil rates to arrive at the desired retail prices of petrol, diesel, domestic LPG and kerosene on the 1st and 16th of every month.
With the global economic meltdown leading to a sharp drop in international crude oil prices from September, state-run fuel retailing companies have been making neat profits on petrol and diesel.
In the second fortnight of December, the oil firms made Rs 11.48 a litre profit on petrol sales.
Crude prices, which had dropped to below USD 40 a barrel from Rs 147 per barrel in July 2008, have since risen to $68 per barrel, a seven-month high.
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