The effect of last week's hike in prices of petrol, diesel and cooking gas has already been offset partially as the price of the basket of crude oil that Indian refiners buy surged 6 per cent to $126.96 a barrel on Friday, the latest day for which data are available.

It was $119.81 per barrel on Thursday. While raising fuel prices last week, the government had said that at $125 per barrel (the price of the Indian crude basket then), the country's oil marketing companies would incur annual revenue losses of Rs 2,45,000 crore (Rs 2,450 billion) on sales.

With the price of the basket now above $125 per barrel, the gap will be higher. Every $1 per barrel rise in the price of the Indian crude oil basket increases the total annual under-realisation by Rs 3,000 crore (Rs 30 billion).

"The hike was calculated on the assumption that global oil prices would fall. As prices continue to rise, the positive effect of the hike on the oil companies will get steadily neutralised," said a senior official in the oil ministry. "There are no signs that prices will fall," he added.

The combination of price hike and duty cuts last week will reduce the under-realisation of the oil marketing companies by Rs 42,000 crore (Rs 420 billion).

The oil companies -- both producers and marketers -- will together bear another Rs 65,000 crore (Rs 650 billion), while the government will issue oil bonds worth Rs 94,600 crore (Rs 946 billion) to the marketing companies. Even after this bailout package, Rs 43,600 crore (Rs 436 billion) was unaccounted for at the time the prices were hiked.

Government officials say that the burden of this unaccounted for amount could fall on the oil companies. "With global crude oil prices increasing, the burden is likely to keep on getting worse," said an official with Indian Oil Corporation [Get Quote].

The high crude oil prices hit shares of the oil marketing companies, with Hindustan Petroleum Corporation [Get Quote] and Bharat Petroleum Corporation [Get Quote] ending lower by 9.21 per cent and 7.02 per cent, respectively, on the Bombay Stock Exchange.