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| IOC's losses drop 5.6% on softening crude rates |
| Press Trust of India / New Delhi Oct 05, 2009, 15:04 IST |
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State-run Indian Oil Corp (IOC), the nation's largest fuel retailer, has seen its losses on fuel sales this fiscal coming down by 5.6 per cent to Rs 21,825 crore on softening international oil prices.
"We were till last month losing Rs 79 crore per day on selling petrol, diesel, domestic LPG and kerosene at Government-controlled rates but this month the losses have come down to Rs 67 crore a day," a company official said.
International oil rates were marginally lower in the second fortnight of September, based on which the current revenue loss have been calculated. The basket of crude oil India buys averaged $67.76 a barrel in the second half as against $68.58 per barrel in the first fortnight.
"The daily losses on fuel sales are down from Rs 90 crore in the first fortnight of September," he said.
IOC and sister PSUs — HPCL and BPCL — which have been barred by the government from revising fuel prices to keep inflation under check, lose Rs 2.23 per litre on petrol, Rs 1.16 a litre on diesel, Rs 204.51 per 14.2-kg domestic LPG cylinder and Rs 16.14 per litre on kerosene, at present.
"At current prices, IOC's revenue loss on fuel sales for full fiscal is likely to be Rs 21,825 crore (as against Rs 23,510 crore estimate of last month)," the official said.
For the industry — IOC plus BPCL and HPCL — the revenue loss is likely to be Rs 38,600 crore compared to previous estimate of Rs 41,440 crore.
The official said revenue losses this month are lower than Rs 3.63 per litre on petrol, Rs 2.33 a litre on diesel, Rs 158.55 per 14.2-kg LPG cylinder and Rs 17.15 on every litre of kerosene for the previous fortnight.
IOC and sister PSUs - HPCL and BPCL, calculate the desired selling price for petrol and diesel on 1st and 16th of every month based on the previous fortnight's average global oil price.
Petroleum Secretary R S Pandey, last month, stated that the government will compensate under-recovery or revenue loss on sale of domestic LPG and kerosene through issue of oil bonds.
At current prices, the revenue loss on kerosene would be Rs 17,000 crore while that on LPG would be another Rs 12,000. These will be met through issue of bonds.
The Rs 10,000 crore under-recovery on petrol and diesel would be partly met by upstream firms like ONGC by way of discounts on crude oil and LPG they sell to the three retailers.
Of the Rs 103,292 crore revenue loss on fuel sales in 2008-09 fiscal, 68 per cent was met by the government through issue of oil bonds. Upstream firms ONGC bore Rs 28,225 crore, GAIL India Rs 1,781.2 crore and Oil India Ltd Rs 2,936.7 crore.
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