India's crude oil import price has dropped to the year's lowest but a cut in petrol and diesel price may happen only if crude falls to $61 per barrel as rupee depreciation has partly offset the gains.

Oil firms were supposed to break-even on sale of petrol, diesel, LPG and kerosene if the price of the basket of crude India buys were to come down to $67 per barrel.

However, with 20 per cent depreciation in value of rupee against the dollar, the break-even point is now at $61 a barrel.

"The benefit of softening of the international oil prices has been partly offset by the recent depreciation of the rupee," a petroleum ministry official said.

Indian Oil [Get Quote], Hindustan Petroleum and Bharat Petroleum are losing about Rs 350 crore (Rs 3.5 billion) per day on fuel sales.

"The domestic retail prices at the time of revision in prices in June were equivalent to Indian basket of crude oil of $66 per barrel.

"With the recent depreciation of rupee against dollar, the current retail prices now correspond to $61 per barrel of Indian basket of crude oil," he said.

The Indian basket of crude oil on Monday fell to $72.20 per barrel, the lowest level this year. It has averaged $79.70 a barrel in October.

The three firms are losing Rs 4.68 per litre on sales of petrol, Rs 11.48 on diesel, Rs 28.07 on kerosene and Rs 322.14 per LPG cylinder and are projected to lose Rs 1,62,158 crore (Rs 1,621.58 billion) on fuel sales this fiscal.

"International prices of crude oil and petroleum products are still higher than the prices at which current retail prices are fixed and so there is no valid reason for downward revision in retail prices," he said.

The official said the three fuel retailers were borrowing heavily for financing their working capital and capital expenditure requirements.   

"The combined borrowings of the three, which stood at Rs 48,400 crore (Rs 484 billion) in March 2007 and Rs 66,900 crore (Rs 669 billion) in March 2008, has increased to Rs 93,500 crore (Rs 935 billion) as of August, 2008," he said.

The oil firms' credit limits have recently been enhanced by Rs 14,000 crore (Rs 140 billion) to enable them to meet their fund requirements till the end of October.

"The interest burden of the three companies during 2008-09 is expected to go up by Rs 4,200 crore (Rs 42 billion) compared to previous year due to increase in borrowings and higher rate of interest," he said.