Government on Monday ruled out an immediate reduction in petrol and diesel prices as state-run firms are still running into daily loss of over Rs 400 crore (Rs 4 billion) despite softening in international oil prices.
"Where is the scope for reducing prices? Oil companies are still making losses," Petroleum Minister Murli Deora told reporters.
The drop in international oil prices has resulted in revenue loss of Indian Oil, Bharat Petroleum and Hindustan Petroleum dip to Rs 400 crore per day from Rs 450 crore (Rs 4.5 billion) a fortnight back.
"Oil companies continue to lose money on sale of petrol, diesel, (domestic) LPG and kerosene. There has not been so much reduction in global prices to warrant a price cut," Petroleum Secretary R S Pandey said.
The basket of crude oil India buys averaged $111.09 a barrel in the second fortnight of August as compared with $117.37 per barrel in the first fortnight of the month.
Based on an average price of the second fortnight of August, retailers are losing Rs 6.31 per litre on petrol, Rs 13.69 on diesel, Rs 31.39 on kerosene and Rs 312.58 per 14.2-kg LPG cylinder. Till last week, they were losing Rs 7.07 per litre on petrol, Rs 16.22 on diesel, Rs 39.55 on kerosene and Rs 348.89 per LPG cylinder.
The three firms are now projected to lose Rs 165,300 crore (Rs 1,653 billion) in full 2008-09 fiscal, down from Rs 184,801 crore (Rs 1,848.01 billion) projections of last week.
A month back the losses were projected at Rs 205,740 crore (Rs 2,057.4 billion).
Pandey said the revenue loss of retailers will be fully compensated, through a combination of oil bonds and assistance from upstream firms like ONGC.
The Indian basket of crude oil averaged USD 113.12 per barrel in August, down from $121-122 a barrel average price when the June 4 hike in petrol, diesel and domestic LPG prices was announced.
IOC, the company that controls about 54 per cent of the market, is projected to lose Rs 90,630 crore (Rs 906.3 billion) on fuel sales this fiscal.
The company loses Rs 11 crore (Rs 110 million) per day on sale of petrol, Rs 112 crore (Rs 1.12 billion) daily on sale of diesel, Rs 63 crore (Rs 630 million) per day on kerosene and Rs 32 crore (Rs 320 million) per day on LPG.
Fuel prices in India are pegged at $68 per barrel, much lower than $112.19 a barrel price on Friday.
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