IOC, BPC, HPC losses seen at Rs79,670 cr in FY11

IOC, BPC, HPC losses seen at Rs79,670 cr in FY11

New Delhi: State-owned Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum may see losses on fuel sales jump over 66% to Rs79,670 crore this fiscal.

The three fuel retailers lost Rs47,960 crore on selling petrol, diesel, domestic LPG and kerosene below cost in 2009-10 fiscal, a top official said.

“The three firms are losing over Rs211 crore every day," he said.

Losses on fuel sales have widened as global oil rates firmed up in March. IOC, BPCL and HPCL currently sell petrol at a loss of Rs6.12 per litre, Rs4.60 a litre on diesel, Rs18.42 per litre on PDS kerosene and Rs265.27 per 14.2-kg LPG cylinder.

The government has not yet said how it will make up for the projected losses for this fiscal. “There is an agreed formula to share under-recoveries for 2009-10 but there is lot of uncertainty for current year," he said.

For FY’10, losses on petrol and diesel are to be met by upstream firms like ONGC and the government was supposed to bear those on cooking fuel. However, the government has not kept its part of the deal.

Of the 9,353 crore loss in April-December period, the upstream firms contributed 8,364 crore to cover for entire shortfall on petrol and diesel. But of the 0,989 crore loss on LPG and kerosene in the first nine months, the finance ministry has provided only 2,000 crore.

Besides the Rs8,989 crore uncovered amount of April -December, about Rs12,000 crore of revenue loss on LPG and kerosene in January-March quarter also remains uncovered.

The firming of international oil rates had led to upward revision in estimates for under-recoveries (revenue loss) for 2009-10 fiscal to Rs47,960 crore from earlier projection of Rs45,000 crore.

The official said IOC, BPCL and HPCL will get only Rs12,000 crore to make up for part of the losses on LPG and kerosene in 2009-10.

IOC would get Rs7,100.18 crore, BPCL Rs2,370.77 crore and HPCL Rs2,529.05 crore.

The compensation is, however, less than 20,989 crore sought by the retailers to make up for the losses they incurred on selling domestic LPG and kerosene below cost during April-December period.

IOC had sought Rs12,419 crore, BPCL Rs4,147 crore and HPCL Rs4,423 crore, he said.