Revenue loss of oilcos down by Rs 1500 cr on rupee rise
New Delhi: Rupee appreciation post government decision to allow FDI in retail has helped cut revenue loss of state-owned fuel retailers by over Rs 1,500 crore in just one fortnight.
Oil PSUs were together projected to lose a staggering Rs 178,491 crore in revenue this fiscal on sale of diesel and cooking fuel based on average oil price and exchange rate of first fortnight of September.
However, since the September 14 decision to allow FDI in retail, rupee has appreciated against the US dollar making import of oil marginally cheaper. Rupee has appreciated from Rs 55.59 to a US dollar average of the first fortnight of September to Rs 54.12 in the second fortnight.
This has helped bring down the projected revenue loss for 2012-13 fiscal to Rs 176,937 crore, industry sources said.
Rupee today closed at 52.39 to a US dollar, the highest level in more than five months.
If this trend continues, the revenue loss projections will come down substantially, they said.
Indian Oil Corp (IOC), Hindustan Petroleum Corp (HPCL) and Bharat Petroleum Corp (BPCL) were selling diesel at a loss of 13.86 per litre despite the steep Rs 5.63 a litre hike. But this loss has now come down to Rs 12.
However, losses on kerosene, whose rates have not been changed since June last year, have widened to Rs 35.63 per litre from Rs 32.70 in last fortnight. Similarly, loss on LPG has also widened to Rs 468.50 per 14.2-kg cylinder from Rs 347 previously.
Sources said the oil firms are losing about Rs 465 crore per day on sale of diesel, domestic LPG and kerosene below cost.
Of this, loss on diesel alone is Rs 246 crore a day.
The three firms reported a combined revenue loss of Rs 47,811 crore on fuel sales in the first quarter. Of this, upstream firms like ONGC made good Rs 15,061 crore by way of discount of crude oil they sell to them.
The ministry sought cash subsidy for the remaining Rs 32,750 crore but the Finance Ministry has not released any.
In the absence of the subsidy support, IOC reported the highest quarterly net loss by any Indian company at Rs 22,451 crore for April-June. HPCL posted Rs 9,249 crore net loss in April-June while BPCL reported a net loss of Rs 8,836 crore for the first quarter.
Oil firms would most likely post net losses even in the second quarter as the logjam in Parliament over coal block allocation has meant that supplementary demands for grants are not approved and no subsidy payout is possible till the next winter session of Parliament in November/December.