State-owned Indian Oil Corporation said on Friday it is losing about Rs 75 crore (Rs 750 million) per day on sale of diesel, domestic LPG and kerosene at rates below production cost.
"We are currently losing Rs 2.01 per litre on diesel, Rs 15.52 a litre on PDS kerosene and Rs 188.47 per domestic LPG cylinder," IOC chairman B M Bansal said in New Delhi.
State fuel retailers IOC, Bharat Petroleum and Hindustan Petroleum sell diesel, domestic LPG and kerosene at government dictated rates which are lower than cost of production.
"We are losing Rs 75 crore (Rs 750 million) per day on sale of these three products," he said.
The government had in June announced freeing of petrol price from its administrative control, allowing oil firms to revise rates in step with cost of raw material (crude oil).
But the actual freeing of petrol prices is yet to happen as state firms have been able to do only a marginal adjustment in rates only once since then.
"Petrol is being sold at a loss of Rs 1.04 per litre," an industry official said. While the government and upstream firms like Oil and Natural Gas Corporation will make up for losses on diesel, LPG and kerosene, those on petrol will have to be borne by the fuel retailers themselves.
Bansal said IOC lost Rs 6,718 crore (Rs 67.18 billion) in revenues on selling fuel below cost during the July-September quarter.
The company had lost Rs 11,013.85 crore (Rs 110.13 billion) in revenues in April-June quarter.
Of this, it got Rs 3,671.26 crore (Rs 36.71 billion) from upstream firms, ONGC, GAIL India and Oil India.
It had to absorb Rs 7,342.59 crore (Rs 73.42 billion) of loss. IOC, BPCL and HPCL put together lost Rs 11,899 crore (Rs 118.99 billion) in revenues on selling diesel, domestic LPG and kerosene below cost in July-September quarter, Bansal said.
The government is yet to announce how the second quarter revenue loss will be met.
