A government official has been quoted as saying, "Oil retailers are losing Rs 2.61 per litre or Rs 15 crore per day on sale of petrol. Together with local taxes, the hike needed to level domestic rates with international prices is about Rs 3 per litre."
It has been reported that major players like IOC, BPCL and HPCL are estimated to have lost Rs 2,450 crore this fiscal on selling petrol. It has to be remembered that the rates were freed from government control in June 2010.
Officials added, "At the current rate, oil firms will accrue another Rs 2,850 crore of loss on sale of petrol, taking the total loss on a fuel that was freed from control, to Rs 5,300 crore for the full fiscal. Oil firms will have to take a call on raising petrol price soon."
The above three firms are not incurring losses in the sale of petrol alone, but is reported to be heftily losing in the sale of diesel, domestic LPG and kerosene. They are suffering loses to the tune of Rs 263 crore per day in this regard. Diesel is currently being sold at a subsidy f Rs 6.05 per litre, kerosene at Rs 23.25 per litre while domestic LPG rates are under-priced by Rs 267 per 14.2-kg cylinder.
A govt official commented, "The industry lost around Rs 65,000 crore in the first half of the current fiscal on the three products and for the full year the revenue loss is estimated at Rs 121,571 crore at the price of Indian basket at USD 110 per barrel."
The fluctuation in the value of the rupee seem to have considerably impacted fuel prices. The Rupee fell to 48 per dollar today in a first since Sept 2009. Officials stated that a stability in price of the three products need to be achieved and said, "Every rupee depreciation, the under- recovery (revenue loss) increases annually by around Rs 9,000 crore."