"The one-time Rs 2.50 per litre increase in petrol and Rs 2 a litre hike in diesel price, announced last month, is grossly inadequate to cover for the spurt in international oil price and increased incidence of taxation," said a senior IOC official in New Delhi.
Despite the hike, petrol is being under-priced by Rs 2.25 per litre while diesel is being sold at a loss of Rs 4.69 per litre.
Of the Rs 4,900 crore lost in April-June quarter, roughly Rs 2,700 crore (Rs 27 billion) was on sale of kerosene through the public distribution system and domestic cooking gas (LPG).
IOC controls half of India's retail fuel market and industry losses would be roughly double the IOC figures.
An industry official said while IOC may manage some profit due to inventory gains, Hindustan Petroleum Corp and Bharat Petroleum Corporation may end Q1 with a net loss.
He said though the spike in global oil prices and hike in duties had warranted a hike of Rs 4.68 per litre in petrol, the government settled for a Rs 2.50 a litre increase. Similarly, on diesel, the hike announced was only Rs 2 per litre despite the deficit of Rs 5.13 per litre.
"We are making a net loss of Rs 130 on sale of every LPG cylinder and over Rs 11 on every litre of kerosene sold," the IOC official said.
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