New Delhi: Public sector oil companies are likely to incur a loss of Rs50,000 crore in the current fiscal on selling fuel below cost, Indian Oil Corporation chairman Sarthak Behuria said on 15 May 2007.
“At current price level, IOC is losing Rs85 crore a day on sale of petrol, diesel, LPG and kerosene,” he told reporters here.
Oil companies are selling petrol at a loss of Rs5.24 a litre, diesel Rs4.40 a litre, kerosene at Rs14.67 a litre and LPG (cooking gas) at a loss of Rs167 per cylinder.
“At current prices, we estimate that the under-recoveries for the entire industry during 2007-08 will be about Rs50,000 crore,” he said.
Petroleum minister Murli Deora said UPA chairperson Sonia Gandhi has clearly asked the government not to raise kerosene and LPG prices at any cost so as not to burden the common man.
“Our endeavour will be to keep the price line unchanged,” he said.
On under-recoveries, he said the previous year’s formula of sharing the revenue losses between upstream companies, government and refining and marketing firms would continue.
ONGC, Oil India Ltd and GAIL will be asked to bear one-third of the under-recoveries and a similar amount will be provided by the government by way of bonds.
“We will shortly initiate discussions with finance ministry on issue of oil bonds,” Deora said.
Behuria said the current fiscal was better than the previous year as refining margins were better. IOC is currently earning a margin of $9-10 on processing every barrel of crude oil compared to $4.5-5 last year.