Indian Oil Corporation (IOC), the nation's largest oil firm, today said it along with other state-owned fuel retailers has asked the government to compensate them for revenue losses incurred on selling petrol below imported cost.
"We have requested [the government] to make good of our losses on petrol," IOC Chairman RS Butola said.
IOC has lost about Rs 443 crore since the last revision in petrol price on December 1 after which rates haven't been changed because of crucial assembly elections in states like Uttar Pradesh.
State-owned oil firms are currently loosing Rs 3-3.20 per litre on petrol, whose pricing was freed by the government from its control in June 2010. After deregulation, rates of petrol should have moved in tandem with imported cost but that hasnt been the case.
IOC lost about Rs 1,277 crore in first nine months of current fiscal and another Rs 360 crore after that, he said.
"Since we are unable to pass on the required increase in petrol prices, we have asked the government that losses be made good by way of cash subsidy," he said.
Though for the record Butola insisted that the government does not give directions to oil firms on revisions on rates of petrol since its deregulation, there are always informal consultations.
Petrol price were last revised on December 1 when they were cut by Rs 0.78 per litre to Rs 65.64 per litre in Delhi.
Besides petrol, the state-owned oil firms lost Rs 11.35 per litre on diesel, Rs 28.76 a litre on kerosene and Rs 378 per 14.2-kg domestic LPG cylinder. IOC alone is losing Rs 239 crore per day on sale of these three products and the industry (IOC plus Bharat Petroleum and Hindustan Petroleum) currently lose Rs 445 crore per day.
Butola said last fiscal oil marketing companies were asked to absorb 8.82% of the revenue loss on selling diesel, domestic LPG and kerosene as the rest was made good by government's cash doleout and assistance from upstream firms like ONGC. This year, this share has gone up to nearly 16%.
For the first nine months, IOC absorbed Rs 8,507 crore of revenue loss.
"We are asking the government to either compensate us fully for losses on diesel, domestic LPG and kerosene or make good the losses on petrol," he said.
IOC, BPCL and HPCL have written jointly written to the government in this regard.
IOC's borrowings have increased to Rs 78,696 crore as on December 31, 2011 from just over Rs 52,000 crore as on March 31, 2011 as it took debt to make up for gap between revenue realised on fuel sales and cost of production.
