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Rediff.com  » Business » Oil firms' losses at Rs 170 cr a day

Oil firms' losses at Rs 170 cr a day

July 01, 2009 14:10 IST
Public sector oil firms have seen losses on fuel sale widening to about Rs 170 crore (Rs 1.7 billion) per day on firming international oil prices and may end the fiscal with over Rs 49,000 crore (Rs 490 billion) in revenue loss.

Indian Oil, Bharat Petroleum and Hindustan Petroleum have seen losses on sale of petrol, diesel, domestic LPG and kerosene inflating from Rs 130 crore (Rs 1.3 billion) to about Rs 170 crore per day, an industry official said.

The three firms calculate the desired retail selling price of the four government-controlled products on 1st and 16th of every month based on average international oil rates of the previous fortnight.

The firming international crude oil prices, which are at a seven-month high of about $73 per barrel, widened losses on petrol to Rs 6.94 per litre from Rs 6.08 per litre in the second half of June. On diesel, the losses have soared to Rs 4.11 a litre from today against Rs 2.96 previously.

The three firms are losing Rs 96.98 per 14.2-kg LPG cylinder and Rs 16.01 on every litre of kerosene.

"The government has to urgently device a means to tackle these losses. The options can be a combination of a marginal price increase in petrol and diesel, issue of government bonds and contribution by upstream firms like ONGC," he said.

A Rs 2 per litre hike in petrol and Re 1 a litre increase in diesel rates has been on cards but even this may prove insufficient going by the rising losses.