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

New Delhi, June 16 (PTI) For the first time in seven
months, Indian government-run fuel retailers are making losses
on selling diesel and together with negative returns on
petrol, LPG and kerosene, the companies may lose Rs 38,700
crore in revenues 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 Monday, 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. PTI ANZ
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