OMCs may lose Rs45,000 cr for selling fuels below cost

OMCs may lose Rs45,000 cr for selling fuels below cost

New Delhi: State-run retailers IOC, BPCL and HPCL may lose about Rs45,000 crore on selling auto and cooking fuels below cost this fiscal, two-third of which will be compensated by the government by issuing bonds.

“Out of these under-recovery (revenue loss), about Rs17,000 crore would be on kerosene alone. Another Rs12,000 to Rs13,000 crore would be on domestic LPG and the remaining Rs15,000 to Rs16,000 crore would be on account of auto fuels petrol and diesel," petroleum secretary R.S. Pandey said.

Indian Oil (IOC), Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) lose 4.69 per litre on petrol and .09 a litre on diesel. They sell LPG at a loss of 158.55 per 14.2-kg cylinder and kerosene at 17.15 per litre loss.

The three firms lose about 170 crore per day and may end the 2009-10 fiscal with 44,274 crore revenue loss if international crude oil prices were to stay at the current level of around USD 70 per barrel.

Pandey said the entire revenue loss on domestic LPG and kerosene would be met by the government possibly through issue of oil bonds.

The same on petrol and diesel would be compensated by upstream firms like ONGC by way of discounts on crude oil and LPG they sell to the three retailers.

“Oil marketing companies (IOC, BPCL and HPCL) may have to bear a part of the under-recovery on auto fuels," he said, adding the proportion has not yet been decided.