Oil Minister Murli Deora has sought a meeting with Finance Minister Pranab Mukherjee to discuss precarious finances of state-owned oil firms, as crude oil appears to be inching towards the $100 per barrel mark.
"I have requested Finance Minister for a meeting tomorrow," Deora said from Mumbai.
Officials however said the meeting has so far not been fixed.
State-owned Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp are losing about Rs 290 crore a day in revenues on selling diesel, domestic LPG and kerosene below the imported cost.
The state firms last week raised petrol price by Rs 2.50-2.54 a litre but are still losing Rs 1.20-1.22 per litre as the hike was insufficient to cover for crude oil that is touching $92 per barrel.
Besides, they are losing Rs 7.65 a litre on diesel, Rs 19.60 a litre on kerosene and Rs 366.28 per 14.2-kg cylinder.
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The three firms are projected to lose Rs 73,600 crore in revenues during the 2010-11 financial year, 55 per cent of which Deora wants the Finance Ministry to meet by way of cash from the central budget.
Deora said he had on January 8 met Mukherjee to seek immediate release of Rs 10,000 crore in interim compensation to state oil companies.
So far, the finance ministry has committed to make up only one-third of the revenue losses from the budget.
"The Finance Minister has been kind enough to sanction Rs 13,000 crore to cover part of under-recoveries in the first half of the current fiscal. I requested him to release another Rs 10,000 crore for third quarter under-recoveries immediately to help PSUs post decent Q3 results," Deora said.
Without government subsidy, HPCL and BPCL are sure to report net loss in the October-December quarter and IOC too may end the three months in red.
The government had in 2008-09 given Rs 71,292 crore, out of the Rs 103,292 crore total revenue loss on selling fuel below cost. "This was 69 per cent of the total under-recovery. During the current fiscal, which has also seen hardening of crude prices, we are seeking just 55 per cent," Deora said.
Besides discussing the compensation for the revenue loss, Deora may also raise the issue of cutting customs duty on crude oil to nil from 5 per cent currently to avoid further increase in retail prices.
He may also want the customs duty on diesel slashed to 2.5 per cent from 7.5 per cent at present, along with a reduction in the specific duty imposed on the most-consumed fuel in the country, a hike in prices of which would have cascading effect on already high inflation.