New Delhi: India’s crude oil import price has dropped to below $100 a barrel, first time since April, but a cut in domestic retail prices is a distant possibility given the fact that state-run oil firms are still losing money on fuel sales.
The basket of crude oil India imports averaged $99 a barrel on Tuesday, the lowest level since 2 April, a Petroleum Ministry official said.
It had averaged $96.52 a barrel on 1 April and crossed the $100 mark on 7 April.
“The Indian basket of crude oil is lower than the $119 -120 level at which the 4 June price hike was announced. But even at current levels, companies are still losing money on sale of petrol, diesel, LPG and kerosene,” he said.
A cut in petrol and diesel prices may not be economically feasible as Indian Oil, Bharat Petroleum and Hindustan Petroleum are projected to lose Rs1,65,300 crore on fuel sales this fiscal.
“The government has to make good half of this revenue loss by issue of oil bonds. The Finance Ministry has already taken an over Rs22,000 crore hit in revenues by way of duty cuts announced in June and a price reduction at this stage may upset its applecart,” the official said.
Retailers are at present losing Rs6.31 per litre on petrol, Rs13.69 on diesel, Rs 31.39on kerosene and Rs312.58 per 14.2kg LPG cylinder.
IOC, BPCL and HPCL together are losing about Rs400 crore per day on fuel sales, he said, adding that the domestic prices are pegged at $68 per barrel crude price.
The official said the Indian basket of crude oil has averaged $103.33 per barrel, against $113.05 a barrel average of August.
The revenue loss of retailers has to be compensated through a combination of oil bonds and assistance from upstream firms like ONGC.
IOC, the company that controls about 54% of the market, is projected to lose Rs90,630 crore on fuel sales this fiscal.
The company loses Rs11 crore per day on sale of petrol, Rs112 crore daily on sale of diesel, Rs63 crore per day on kerosene and Rs32 crore per day on LPG.
Fuel prices in India are pegged at $68 per barrel, much lower than $99 a barrel price of 9 September.