IOC losing Rs 297 crore every day

New Delhi: State-owned Indian Oil Corporation (IOC) is losing Rs 297 crore per day on selling diesel, domestic LPG and kerosene at government-controlled rates, a company official said here.

“We are losing Rs 18.11 per litre on diesel, Rs 28.33 a litre on kerosene and Rs 315.86 per 14.2-kg domestic LPG cylinder,” he said.

IOC loses Rs 196 crore everyday on selling diesel below its imported cost, Rs 53 crore on kerosene and Rs 48 crore on domestic LPG.

Diesel prices were last revised in June last year when crude oil was around USD 71-72 per barrel. It is trading at USD 110 a barrel now. Domestic LPG and kerosene rates too were revised last in June 2010.

The government has not allowed oil companies to raise fuel prices in line with imported cost to keep inflation under check.

“Retail selling price of diesel in Delhi should have been Rs 55.86 a litre as against Rs 37.75 per litre currently,” the official said.

IOC along with public sector firms Hindustan Petroleum and Bharat Petroleum are projected to lose Rs 1,77,562 crore in revenues on selling diesel, domestic LPG and kerosene below their imported cost in 2011-12 fiscal.

The revenue loss, termed as under-recovery by oil firms, will be the highest-ever, even more than what they lost in 2008-09 when crude oil touched an all-time high of USD 147 per barrel.

In addition, they lose about Rs 4.50 per litre on petrol, whose rates have not moved in tandem with the imported cost despite its pricing being freed from the government control in June last year.

“Losses on petrol are not included in the under-recovery figures for 2011-12 as it is a decontrolled commodity,” the official said.

The basket of crude oil India buys had averaged USD 83.57 per barrel in 2008-09 and calculations for the next fiscal have been done at the prevailing rates of around USD 110 a barrel.

“The average price of Indian basket of crude oil last fiscal was USD 85.09 per barrel, higher than the 2008-09 average when the government had cut customs and excise duty on crude oil and products to check the impact of rising international rates on domestic markets,” the official said.

Finance Minister Pranab Mukherjee has not agreed to cut customs and excise duty on crude and product this time to protect his projected fiscal deficit.

“The situation in the current 2011-12 fiscal will be worse, the three PSU oil marketing companies are losing Rs 540 crore per day on diesel, domestic LPG and kerosene sales,” the official said.