JOIN USThe hike is owing to a dip in the rupee, touching a two-year low against the US dollar, increasing the cost of importing crude oil.
There is, however, no word yet on a hike in the prices of diesel, kerosene and gas. A senior official of the IOC, however, has denied any proposal to hike the fuel price.
The last petrol price hike of a steep Rs 5 per litre was effected on May 15, immediately after the last phase of polling in West Bengal.
A government official reportedly said: “Oil retailers are losing Rs 2.61 per litre or Rs 15 crore per day on sale of petrol. Together with local taxes, the hike needed to level domestic rates with international prices is about Rs 3 per litre.”
IOC, BPCL and HPCL have lost Rs 2,450 crore this fiscal on selling petrol—whose rates were freed from government control in June last year—below the cost.
“At current rate, oil firms will accrue another Rs 2,850 crore of loss on sale of petrol, taking the total loss on fuel that was freed from control to Rs 5,300 crore for the full fiscal,” the official said. “Oil firms will have to take a call on raising petrol price soon.”
The three firms are losing Rs 263 crore per day on selling diesel, domestic LPG and kerosene below cost. Diesel subsidy is Rs 6.05 a litre and kerosene Rs 23.25 per litre. Domestic LPG rates are under priced by Rs 267 per a 14.2-kg cylinder.
“The industry lost around Rs 65,000 crore in the first half of the current fiscal on the three products, and for the full year, the revenue loss is estimated at Rs 1,21,571 crore at the price of Indian basket at $ 110 per barrel,” said the official.
Rupee fell to 48 per dollar on Wednesday for the first time since September 2009. “With every rupee depreciation, the under recovery (revenue loss) increases annually by around Rs 9,000 crore,” he said.
The official also underscored the need for action on the price front on all the three products.