IOC losing Rs 2,500 cr a month on fuel sales

Indian Oil Corp, the nation's biggest fuel retailer, on Monday said it is losing Rs 2,500 crore every month on selling petrol, diesel, LPG and kerosene below the imported cost.

"We are currently losing Rs 6.13 a litre on petrol, Rs 3.76 per litre on diesel, Rs 14.67 a litre on kerosene and Rs 167.14 per LPG cylinder," Sarthak Behuria, Chairman, IOC said.

The government has not allowed public sector firms like IOC, Bharat Petroleum and Hindustan Petroleum to raise fuel prices in line with rise in international crude oil prices.

"We are losing about Rs 80-85 crore a day on fuel sales," he said, hoping the burden sharing scheme involving upstream firms like ONGC bearing a part of the under-realisation and government issuing oil bonds will continue this fiscal.

He, however, did not say if IOC and other public sector firms will press the government for increasing retail prices.

The total under realisation on fuel sale in the full 2007-08 fiscal is estimated at Rs 50,400 crore.

Government compensates a third of the losses by giving fuel retailing oil bonds.

ONGC, GAIL and Oil India Ltd share a similar amount and the rest is borne by the refiners.

"Our net under-realisation on fuel sales (after taking into account the bonds and ONGC contribution) was Rs 2,190 crore in 2006-07," he said.

IOC got Rs 13,943 crore in oil bonds from the government and about Rs 11,800 crore from ONGC/GAIL.

"The rupee appreciation and good refining margins have helped soften the under-realisation on fuel sale," he said.

Without these, the total under-realisation this year would have been Rs 75,000 crore. Last year, the total under-recovery was just over Rs 70,000 crore.