IOC suffers loss of Rs 94 cr a day on fuel sale

State-run Indian Oil Corporation (IOC) today said it is losing Rs 94 crore per day on sale of petrol, diesel, domestic LPG and kerosene below the cost.

"The refinery margins have come down and we are yet to get bonds to make up for the under-recovery (revenue loss) on LPG and kerosene," IOC Chairman Sarthak Behuria told reporters here.

IOC, he said, was currently losing Rs 94 crore per day on selling the four products below cost. "For the full fiscal, we estimate Rs 26,490 crore revenue loss on the four products."

The company and other public sector fuel retailers Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) are currently selling petrol at Rs 3.68 a litre below cost and diesel at Rs 2.90 per litre lower than cost. They make a loss of Rs 18.13 a litre on kerosene and Rs 250.67 per 14.2-kg domestic LPG cylinder.

Current refining margins are about $3 a barrel, he said.

IOC, BPCL and HPCL have not been given oil bonds for the losses they made on selling LPG and kerosene during the first three quarters of current fiscal.

"We have written to the Petroleum Ministry and we understand they have taken this up with the Ministry of Finance. Hopefully, we will get the oil bonds soon," he said.

IOC is to get Rs 11,852 crore worth of oil bonds for the three quarters while BPCL and HPCL would get a combined Rs 9,019 crore worth of government bonds.

The government had earlier this year decided to compensate the oil firms for the losses they make on selling LPG and kerosene below cost by way of oil bonds. The same on petrol and diesel are to be met through contribution from upstream firms like Oil and Natural Gas Corp (ONGC).

The industry is projected to lose Rs 45,820 crore on the four products in the fully 2009-10 fiscal.