State-owned oil companies lose Rs 6.80 on each litre of diesel sale

The loss on sale of diesel has climbed to Rs 6.80 even as state-owned oil companies for the second time skipped the monthly price increase on government diktat.

State-owned firms Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp are losing Rs 6.80 on every litre of diesel sold, up from Rs 5.49 a litre last month as rupee depreciated against the US dollar and international oil prices firmed up, an official statement issued here said.

The loss, which is made good through government subsidy, was on a declining trend since March when it stood at Rs 8.37. This was a result of rupee strengthening against the US dollar.

The oil firms last month skipped the monthly hike of 40-50 paisa a litre that the Cabinet had decided in January last year for wiping out of entire losses, on the pretext that losses have dropped below Rs 6.

They said Rs 6 was the subsidy that an expert committee headed by Kirit Parikh had suggested should be provided by the government. That report has not been accepted by the government so far.

Oil firms yesterday again skipped the monthly diesel price increase as well as a minimum 50 paisa raise needed in petrol as the Congress-led government was wary of taking unpopular decision during elections.

According to the statement, rupee depreciated to Rs 60.54 to a US dollar in the second fortnight of April (based on which desired selling prices and the gap between it and retail price is calculated) from Rs 60.07 in first half.

Also, international gasoline rates firmed up to USD 119.97 a barrel from USD 115.97.

Besides diesel, oil firms are losing Rs 33.85 per litre on kerosene sold through the public distribution system, down from Rs 34.43 a litre last month. On cooking gas (LPG), the revenue loss has come down to Rs 449.13 per 14.2-kg cylinder from Rs 506.06 last month.

The Cabinet had in January last year decided that diesel prices should be raised by 40-50 paise a litre every month until losses on the fuel are wiped out. Diesel prices have risen by a cumulative Rs 8.33 a litre in 14 instalments since January 2013.

"Oil marketing companies, effective April 16, 2014, are now incurring combined daily under-recovery of Rs 342 crore on the sale of diesel, PDS kerosene and domestic LPG. This is higher than Rs 337 crore daily under-recoveries during previous fortnight," the statement said.