PSU oil sale losses double in three yrs

Higher crude oil prices have almost doubled the under-recoveries of government-owned oil marketing companies "" Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum "" in the past three years.

Under-recoveries, the gap between the actual selling price and the desired selling price of the subsidised petroleum products, have gone up from Rs 40,000 crore in 2005-06 to Rs 49,000 crore in 2006-07, and are projected to jump to Rs 71,808 crore in the current year.

The price of the Indian crude basket in January 2008 "" at $89.7 a barrel "" is 70 per cent higher than the $52.8 per barrel in January last year.

Under-recoveries for gasoline (petrol) and diesel have been the highest in January 2008 at Rs 8.6 per litre and Rs 10.1 per litre, respectively, as compared with an over-recovery of 0.50 paise per litre on gasoline in January 2007 and under-recovery of 0.9 paise per litre for diesel during the same period, according to a recent report from Edelweiss Research.

Under-recoveries for domestic cooking gas (or LPG) increased from Rs 157 in January 2007 to Rs 309 in January 2008.

At present the cost of the Indian crude oil basket stands at $87.66 per barrel as compared with brent crude at $89.37 barrel.

The price gap between the Indian crude oil basket and brent crude has been narrowing as the price of Dubai and Oman crude is also on the rise.