New Delhi: India’s crude oil import price has dropped to the year’s lowest but a cut in petrol and diesel price may happen only if crude falls to $61 per barrel as rupee depreciation has partly offset the gains.
Oil firms were supposed to break-even on sale of petrol, diesel, LPG and kerosene if the price of the basket of crude India buys were to come down to $67 per barrel. However, with 20% depreciation in value of rupee against the US dollar, the break-even point is now at $61 a barrel.
“The benefit of softening of the international oil prices has been partly offset by the recent depreciation of the rupee,” a Petroleum Ministry official said.
Indian Oil, Hindustan Petroleum and Bharat Petroleum are losing about Rs350 crore per day on fuel sales.
“The domestic retail prices at the time of revision in prices in June were equivalent to Indian basket of crude oil of $66 per barrel. With the recent depreciation of rupee against US dollar, the current retail prices now correspond to $61 per barrel of Indian basket of crude oil,” he said.
The Indian basket of crude oil yesterday fell to $72.20 per barrel, the lowest level this year. It has averaged $79.70 a barrel in October.
The three firms are losing Rs4.68 per litre on sales of petrol, Rs11.48 on diesel, Rs28.07 on kerosene and Rs322.14 per LPG cylinder and are projected to lose Rs1,62,158 crore on fuel sales this fiscal.
“International prices of crude oil and petroleum products are still higher than the prices at which current retail prices are fixed and so there is no valid reason for downward revision in retail prices,” he said.