If you thought the sheikhs of Arab were creaming off on oil, think again. India's public sector oil companies and the government make more out of the oil that India imports than any cartelised OPEC member.
Indian customers pay more than two-and-a-half times the cost of production whenever they drive into a gas station to fill up their tanks with petrol or diesel -- and that isn't only because of hefty taxes.
Oil industry experts reckon that the companies are raking in net profits of around $4.5 on every barrel of oil that reaches the public.
By international standards that's a very high figure. Most international companies earned net profits of between $0.62 and $1.38 a barrel during 1999-2002.
How does the mathematics work out for the Indian oil companies? The state-owned oil companies in 2002-03 charged a stupendous $66 per barrel from customers but they bought the oil for an average $26 a barrel. That's a difference of $40 from the well-head to the petrol pump.
A major chunk of the money, of course, goes to the government as indirect and direct taxes on every barrel of oil sold. These taxes add up to $20.50 per barrel.
"It is a highly taxed sector. This needs to come down to make petroleum products affordable," says S Madhavan, executive director, PricewaterhouseCoopers.
But government taxes do not entirely explain the hefty price rise that takes place from well-head to pump. The average cost of refining crude in India is remarkably cheap at around $1.5 per barrel.
Indian refineries are, in fact, probably more efficient than their counterparts abroad where average costs hover around $2.50 to $3 a barrel.
To that the oil companies add marketing and other additional costs. That may seem on the steep side but the oil companies defend this on the ground that they have to haul supplies to remote corners of the country and they aren't allowed to recover this in any other way from the customer.
After all these costs, their balance sheets show that the oil companies make a net profit after tax of around $4.5 a barrel. This includes income from sources like interest and dividends. However the income from these sources is not more than 10 per cent of the total net profits.
Oil industry officials concede profit is very high by international standards but say it's necessary to build in high margins because the government still controls the prices of petrol and diesel and doesn't allow them to raise rates when crude oil becomes more costly internationally.
Also, the oil companies are forced to absorb losses on subsidised cooking gas and kerosene sold through the public distribution system.
In recent months the oil companies have been caught in a double-whammy because the international prices of these two cooking fuels have hit the roof even as the government has been slashing subsidies.
"A major part of the profits made from other products and businesses is being used by the oil companies to cushion this," says an oil industry expert.
Whatever the reasons, the oil companies have turned in sterling profits in recent years. Indian Oil Corporation's net profit hit Rs 6,115 crore (Rs 61.15 billion) in 2002-03. That moved up steeply by 14 per cent to Rs 7,005 crore (Rs 70.05 billion) in 2003-04.
Similarly, Bharat Petroleum Corporation's net profit spurted a whopping 35 per cent to Rs 1,694 crore (Rs 16.94 billion) in 2003-04 from Rs 1,250 crore (Rs 12.5 billion) in 2002-03.
The sharp rise in profits was mainly caused by high refining margins -- the difference between the cost of refining and the cost at which petrol and diesel are sold.
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