State-owned Indian Oil Corp (IOC) is losing Rs 151 crore per day in revenues on selling diesel, domestic LPG and kerosene below their imported cost, a company official said on Thursday. "We are losing very heavily on diesel after international oil prices firmed up to $90 a barrel," he said. IOC is losing Rs 6.99 per litre of diesel, Rs 19.60 a litre of kerosene and Rs 366.28 per 14.2-kg domestic LPG cylinder.
International oil prices have risen as freezing weather in the northern hemisphere has increased energy demand for heating. The spurt has resulted in the difference between domestic retail and international benchmark prices widening.
While the government deregulated petrol prices in June this year, state-owned firms continue to sell diesel, domestic LPG and kerosene below cost to keep inflation in check.
The official said IOC is losing Rs 70 crore (Rs 700 million) per day on diesel alone, while the loss on kerosene and domestic LPG is Rs 38 crore (Rs 380 million) and Rs 43 crore (Rs 430 million), respectively.
"For the full fiscal, at the current level of international oil prices, IOC will lose Rs 40,169 crore (Rs 401.69 billion) in revenues," he said.
Cumulatively, IOC and the two other state-owned oil marketing companies, Hindustan Petroleum Corp (HPCL) and Bharat Petroleum Corp (BPCL), are projected to lose Rs 72,812 crore (Rs 728.12 billion) in revenue on subsidised fuel sales in the full 2010-11 fiscal.
Last week a meeting of the Empowered Group of Ministers, which was to consider a hike in diesel and domestic LPG prices, was indefinitely postponed on inflation concerns. Diesel has a weightage of 4.67 per cent in inflation, while LPG contributes 0.91 per cent. A hike now would further accelerate inflation, which is currently at 7.48 per cent.
The EGoM headed by Finance Minister Pranab Mukherjee was originally scheduled to meet on December 22 but was deferred to December 30.
The meeting was at the last moment deferred without a new date being given. The panel was to consider at least a Rs 2 per litre hike in diesel price and Rs 30-40 per cylinder raise in LPG rates.
