State-owned oil firms will lose a whopping Rs 174,000 crore (Rs 1,740 billion) on selling fuel at government-controlled rates this fiscal, 68 per cent more than what they lost when crude oil touched an all-time high in 2008-09.
Indian Oil, Bharat Petroleum and Hindustan Petroleum will "at current international crude oil prices lose Rs 174,126 crore (Rs 1,741.26 billion) in revenues on selling diesel, domestic LPG and kerosene below their imported cost in 2011-12 fiscal," a government official said on Monday.
The revenue loss, termed as under-recovery by oil firms, will be the highest-ever, even more than what they lost in 2008-09 when crude oil touched an all-time high of $147 per barrel.
The three oil firms currently lose a record Rs 16.76 per litre on diesel, Rs 28.33 a litre on kerosene and Rs 315.86 per 14.2-kg domestic LPG cylinder.
In addition, they lose about Rs 4.50 per litre on petrol, whose rates have not moved in tandem with the imported cost despite its pricing being freed from government control in June last year.
"Losses on petrol are not included in the under-recovery figures for 2011-12 as it is a decontrolled commodity," the official said.
The basket of crude oil India buys had averaged $83.57 per barrel in 2008-09 and calculations for the next fiscal have been done at the prevailing rates of around $110 a barrel.
"The average price of Indian basket of crude oil last fiscal was $85.09 per barrel, higher than the 2008-09 average when the government had cut customs and excise duty on crude oil and products to check the impact of rising international rates on domestic markets," the official said.
Finance Minister Pranab Mukherjee has refused to cut customs and excise duty on crude and product this time to protect his projected fiscal deficit.
"The situation in current 2011-12 fiscal will be worse...the three PSU oil marketing companies are losing Rs 492 crore (Rs 4.92 billion) per day on diesel, domestic LPG and kerosene sales," he said.
In 2008-09, the government had issues oil bonds worth Rs 71,292 crore (Rs 712.92 billion) to the three firms to make up for more than two-thirds of the revenue loss. Upstream oil firms like ONGC provided another Rs 32,000 crore (Rs 320 billion).
In the 2010-11 fiscal, the three firms lost Rs 78,061 crore (Rs 780.61 billion), but so far the government has provided only Rs 20,911 crore (Rs 209.11 billion in compensation.
