During the first fortnight of May, the oil companies were losing Rs 495 crore per day on the sale of diesel, domestic LPG and kerosene below their imported cost. However, in the second half of the month, the losses have come down to Rs 479 crore.

Oil firms calculate the desired increase in fuel prices on 1st and 16th of every month, based on the average oil price of the previous fortnight.

"The May 1-15 average of the basket of crude oil India buys, at USD 112.32 per barrel, is lower than the USD 118 per barrel average of the previous month," an industry official said.

Indian Oil Corp (IOC), Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) were projected to lose Rs 180,208 crore in revenue for the full fiscal, but now, the projected revenue loss is down to Rs 170,676 crore.

The official said the companies are losing Rs 14.66 per litre on diesel currently, down from their Rs 16.17 a litre under-recovery till last week. After adding local sales tax or VAT, the desired increase in diesel price to make it at par with international rates will be Rs 16.49 per litre in Delhi.

State-run oil firms also lose Rs 29.69 a litre on kerosene and Rs 329.73 per 14.2-kg domestic LPG cylinder.

Yesterday, Finance Minister Pranab Mukherjee stated in Kolkata that an Empowered Group of Ministers (EGoM) under him would meet soon to decide on raising diesel, domestic LPG and possibly kerosene prices.

Last week's Rs 5 per litre hike in petrol price was the steepest hike ever, but was short of the Rs 10.5 per litre desired increase in rates to make the retail fuel price at par with the imported cost.

The government had in June last year freed petrol prices and had announced its intention to do the same for diesel pricing in due course of time. Though IOC, BPCL and HPCL had been given the freedom to decide on the retail selling price of petrol, they informally consulted the Oil Ministry on every revision.

The trio have not revised rates since January as five crucial states, including West Bengal, Tamil Nadu and Kerala, went to polls.

A day after the State Assembly results, the firms hiked the petrol price by Rs 5 per litre, which was less than half of the Rs 10.50 a litre increase needed to cover for the cost of imported crude oil, which had touched a two-and-half year high of USD 110 per barrel.
The official said crude oil was ruling at USD 73-74 per barrel when diesel, LPG and kerosene rates were last revised in June, 2010.