Petroleum Min seeks Rs 11,853 cr oil bonds

The Petroleum Ministry has sought oil bonds worth Rs 11,853 crore for state-run fuel retailers to make up for the losses they incurred on selling domestic LPG and kerosene below cost during the first half of the current fiscal.

Three fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) lost Rs 15,856 crore in revenues on selling petrol, diesel, domestic LPG and kerosene below cost during the first half of the current fiscal, a ministry official said.

Of this, Rs 11,853 crore is revenue lost on LPG and kerosene, the remaining Rs 4,003 crore was on account of petrol and diesel.

While the government had committed to meeting the revenue loss arising from its dictate of not increasing price of domestic LPG and kerosene in step with the cost, non-issuance of oil bonds till now has led HPCL and BPCL report net losses in the July-September quarter. However, IOC barely scrapped through.

HPCL reported a net loss of Rs 136.68 crore, while BPCL posted a net loss of Rs 158.77 crore. IOC was slightly better off, registering a net profit of Rs 284.36 crore.

IOC is to get oil bonds worth Rs 7,136 crore, HPCL Rs 2,443 crore and BPCL Rs 2,274 crore.

The official said the government had earlier this year decided to make good all of the revenue loss on sale of domestic LPG and kerosene through issue of oil bonds, while the same on petrol and diesel would be mostly met by upstream firms like OIL and Natural Gas Corporation (ONGC).

The three firms currently lose Rs 3.38 a litre on petrol, Rs 2.95 per litre on diesel, Rs 16.34 a litre on kerosene and Rs 201.88 per domestic LPG cylinder as the government has not allowed them to revise retail prices in line with cost.

"They lose over Rs 155 crore per day on fuel sales and if the prices stay at current levels, the three will end the fiscal with a total revenue loss of Rs 43,240 crore," he said.

The official said for the July-September quarter, IOC, BPCL and HPCL got Rs 3,443 crore from upstream firms like ONGC, Oil India and GAIL India by way of discount on crude oil and LPG they sell to the retailers. This made good the losses on automobile fuels.

ONGC shelled out Rs 2,630 crore, GAIL Rs 459 crore and OIL Rs 354 crore. ONGC had in Q1 contributed Rs 429 crore, while GAIL provided Rs 75 crore and OIL Rs 58 crore.

Fuel retailers IOC, BPCL and HPCL incurred a loss of Rs 7,759 crore on sale of PDS kerosene and Rs 4,094 crore on domestic LPG in the April-September period.

The government, which had last fiscal issued oil bonds worth Rs 71,292 crore, has not issued any bonds to the three PSUs for revenue loss during the current fiscal.