Oil cos may see 30% cut in FY14 revenue loss on falling crude
New Delhi: State-owned oil firms are likely to see revenue loss on sale of diesel and cooking fuel cut by over 30 percent to Rs 112,000 crore during the current fiscal on falling international oil rates.
Indian Oil Corp (IOC), Hindustan Petroleum Corp (HPCL) and Bharat Petroleum Corp (BPCL) lost a little less than Rs 160,000 crore in 2012-13 on sale of diesel, domestic LPG and kerosene at government controlled rates, which are way below market price.
"It (under-recoveries or revenue loss) may come down this fiscal. Earlier it was estimated at Rs 130,000 crore (but) it may be in the range of Rs 112,000 crore as of Thursday," IOC Chairman R S Butola told reporters on sidelines of the CII AGM here.
Oil firms currently sell diesel at a loss of Rs 7.34 a litre, kerosene at Rs 32.02 per liter and LPG at Rs 434.50 per 14.2-kg cylinder. They lose Rs over 320 crore per day on sale of the three fuels.
Butola said the three firms lost about Rs 40,000 crore in the fourth quarter of 2012-13 fiscal.
"They are reducing, but it has been only four days this fiscal. We have to wait. The forecast so far is that prices may be subdued. This is too early to make any projection," he said.
IOC alone would lose Rs 60,000 crore this fiscal, he said.
The government, which had previously provided Rs 55,000 crore towards fuel subsidy, has provided another Rs 25,000 crore for 2012-13.
Another, Rs 60,000 crore is to be made good by upstream firms like ONGC.
"There (would) still be Rs 21,000 crore-odd uncovered under-recovery which will be carried forward in the next fiscal," he said.
On global crude price, he said: "crude has been subdued for sometimes, but they have not declined. It is USD 109 or 110 per barrel now."
Speaking at the AGM, Butola said the biggest challenge in the oil and gas sector is the lack of a pricing policy.
"Some of the products have been deregulated like petrol," he said adding there has been a decision on diesel to caliberate small monthly hikes. But LPG and kerosene continue to be sold at subsidised rates.