IOC losing Rs92 cr daily on fuel sales

IOC losing Rs92 cr daily on fuel sales

New Delhi: State-run Indian Oil Corp is losing Rs92 crore per day on sale of petrol, diesel, domestic LPG and kerosene as government has not allowed it to revise rates in line with firming international oil prices.

“International crude oil prices are on the rise again and so are our under-recoveries (or revenue loss) on fuel sales," an IOC official said.

The company is currently losing Rs3.85 per litre on petrol, Rs3.71 a litre on diesel, Rs16.34 per litre on kerosene sold through PDS and Rs201.88 per 14.2 kg domestic LPG cylinder.

“Till last week, we were losing Rs84 crore per day on the four products. This is now widened to Rs92 crore a day," he said.

At current rates, IOC may end the fiscal with a revenue loss of Rs25,440 crore.

The revenue loss for the industry (IOC and Bharat Petroleum and Hindustan Petroleum) is projected at Rs45,160 crore in 2009-10. “The industry is losing about Rs163 crore per day," he said.

The official said the government had earlier this year decided to make good all of the revenue loss on sale of domestic LPG and kerosene through issue of oil bonds, while the same on petrol and diesel would be mostly met by upstream firms like OIL and Natural Gas Corp (ONGC).

“But the government is yet to issue oil bonds for the revenue loss in first half," he said.

The non-issuance of the oil bonds led to HPCL and BPCL posting net losses in the July-September quarter while IOC barely scrapped through.

HPCL reported a net loss of Rs136.68 crore, while BPCL posted a net loss of Rs158.77 crore. IOC was slightly better off, registering a net profit of Rs284.36 crore.

For April-September, the retailers would have to be issued oil bonds worth Rs1,853 crore to make up for the losses they incurred on selling domestic LPG and kerosene below cost, the official said.

IOC, BPCL and HPCL lost Rs15,856 crore revenue on selling petrol, diesel, domestic LPG and kerosene below cost during the first half of the current fiscal. Of this, Rs11,853 crore is revenue lost on LPG and kerosene, the remaining Rs4,003 crore was on account of petrol and diesel.

IOC is to get oil bonds worth Rs7,136 crore, HPCL Rs2,443 crore and BPCL Rs2,274 crore, he said.

The official said for the July-September quarter, IOC, BPCL and HPCL got Rs3,443 crore from upstream firms like ONGC, Oil India Ltd and GAIL India Ltd by way of discount on crude oil and LPG they sell to the retailers. This made good the losses on automobile fuels.

ONGC shelled out Rs2,630 crore, GAIL Rs459 crore and OIL Rs354 crore. ONGC had in Q1 contributed Rs429 crore, while GAIL provided Rs75 crore and OIL Rs58 crore.

The government had last fiscal issued oil bonds worth Rs71,292 crore.