PSUs making losses on fuel sale;may lose Rs 38,700cr this year

PSUs making losses on fuel sale;may lose Rs 38,700cr this year

Indian Oil, Bharat Petroleum and Hindustan Petroleum from today are selling diesel at a loss of Rs 2.96 a litre, an industry official said.

In the first half of this month, they were barely breaking even on diesel, the most consumed auto fuel in India.

The firming international crude oil prices, which are ruling at seven-month high of USD 71 per barrel, have widened losses on petrol to Rs 6.08 per litre from Rs 3.68 a litre in the first half of June.

"The three are currently losing Rs 135 crore per day on sale of petrol, diesel, domestic LPG and kerosene," he said.

The government has been mulling decontrolling petrol and diesel prices for couple of months now but may be fast losing the window as the move would now result in steep rise in fuel prices. Freeing of fuel prices was idle when crude had fallen to below USD 40 a barrel earlier this year.

The three firms are losing Rs 69.49 per 14.2-kg LPG cylinder and Rs 12.65 on every litre of kerosene, he said.

The state-run firms were till last month selling diesel at Rs 0.32 a litre profit which helped them partly neutralise the losses on sale of petrol, domestic LPG and kerosene.

Since November, the three had been making profit on sale of diesel - the margin being as high as Rs 6.19 a litre in first fortnight of March. On petrol, they made profits till second fortnight of March and loses thereafter.

However, the rising global crude oil prices have eroded the margins and the three firms have seen revenue loss on fuel sale widen to Rs 135 crore per day from Rs 72 crore per day till yesterday, the official said.

For the 2009-10 fiscal, the three firms, which calculate desired retail end prices on 1st and 16th of every month based on the average of previous fortnight, are estimated to lose Rs 38,700 crore on fuel sales.

The official said IOC, BPCL and HPCL are currently losing about Rs 22 crore per day on sale of petrol, Rs 53 crore on diesel, Rs 48 crore on kerosene and Rs 11 crore on LPG.

With the global economic meltdown leading to a sharp drop in international crude oil prices from September, state-run fuel retailing companies have been making neat profits on petrol and diesel.

In the second fortnight of December, the oil firms made Rs 11.48 a litre profit on petrol sales.

Crude prices, which had dropped to below USD 40 a barrel from Rs 147 per barrel in July 2008, have since risen to USD 68 per barrel, a seven-month high.