Petrol sale: Loss @ 91,053 crore

Spiralling crude oil prices have pushed up the revenue loss of oil firms on sale of petrol, diesel, LPG and kerosene to Rs 91,053 crore (Rs 910.53 billion), necessitating additional government assistance in the form of oil bonds of Rs 34,153 crore (Rs 341.53 billion) during the current fiscal.

The government had on June 5 decided to issue oil bonds worth Rs 28,000 crore (Rs 280 billion) to public sector oil firms to meet more than one-third of the estimated Rs 73,512 crore (Rs 735.12 billion) under-recoveries on fuel sale for 2006-07.

Another Rs 24,000 crore (Rs 240 billion) was to come by way of assistance from ONGC while the Rs 4 a litre hike in petrol and Rs 2 per litre increase in diesel price was to contribute Rs 9,396 crore (Rs 93.96 billion).

However, with crude hovering around $73-74 a barrel, $5-6 more than June 5 when the package was worked out, the estimated under-recoveries have gone up, a top government official said.

"Under-recoveries on fuel sale in April-June was Rs 17,398 crore (Rs 173.98 billion) and for the rest of the year, we estimate another Rs 73,655 crore (Rs 736.55 billion) revenue loss," he said.

After factoring in Rs 6,437 crore (Rs 64.37 billion) gained from shift to trade parity and Rs 5,500 crore (Rs 55 billion) expected from restricting PDS kerosene to BPL families only and discounts from refineries, a gap of Rs 34,153 crore (Rs 341.53 billion) was left uncovered.

"The finance ministry is yet to issue the first tranche of quarterly oil bonds and the increased under-realisation would put pressure on the government for additional support, possibly through oil bonds," the official said.

"Even after the June 5 price rise, public sector oil retailing firms - Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp - are losing Rs 5.59 a litre on petrol, Rs 7.84 per litre on diesel, Rs 133 per LPG cylinder and Rs 18 a litre on kerosene," the official said.

Private retailers like Reliance Industries Ltd are losing Rs 3.37 a litre on petrol and Rs 5.77 per litre on diesel.

The official said oil retailing firms lost Rs 1,906 crore (Rs 19.06 billion) in revenues on sale of petrol in April-June, Rs 8,759 crore (Rs 87.59 billion) on diesel, Rs 4,522 crore (Rs 45.22 billion) on kerosene and Rs 2,211 crore (Rs 22.11 billion) on LPG.

During the remaining nine months of current fiscal, under realisation on petrol is estimated at Rs 6,958 crore (Rs 69.58 billion), Rs 35,542 crore (Rs 355.42 billion) on diesel, Rs 15,514 crore (Rs 155.14 billion) on kerosene and Rs 15,642 crore (Rs 156.42 billion) on LPG.