New Delhi: The fall in international oil prices is likely to cut losses on diesel and cooking fuel by almost half to Rs 84,475 crore this fiscal, a government official said on Monday.
Indian Oil Corp (IOC), Hindustan Petroleum Corp (HPCL) and Bharat Petroleum Corp ( BPCL) lost Rs 1,61,029 crore in 2012-13 on sale of diesel, domestic LPG and kerosene at government controlled rates, which are way below market price.
"Global oil prices have softened to about USD 101 per barrel from USD 110. At current rates, the under-recovery (revenue loss) on diesel and cooking fuel is like to be Rs 84,475 crore," he said.
The softening of international oil prices have meant that losses on diesel come down from Rs 7.34 a litre at the beginning of the fiscal to Rs 3.80 currently.
The under-recovery on domestic cooking gas (LPG) has come down to Rs 378.38 from Rs 434.50 per 14.2-kg cylinder, while the same on kerosene has been cut to Rs 29.33 a litre from Rs 32.02 earlier.
Oil firms had lost Rs 78,190 crore on fuel sale since 2010-11. This climbed to Rs 138,541 crore in 2011-12 and to Rs 161,029 crore in the financial year ending March 31, 2013. Of the losses in 2012-13, Rs 92,061 crore were on account of diesel alone while Rs 39,558 crore was on account of LPG.
The remaining Rs 29,410 crore was on kerosene sold through PDS.
Of the losses in 2012-13, the government provided about Rs 80,000 crore by way of cash subsidy and another Rs 60,000 crore has been made good by upstream firms like ONGC.
"There is still be Rs 21,000 crore uncovered under- recovery which will be carried forward in 2013-13," he said.
Upstream firms ONGC, OIL and GAIL share a part of the revenues that retailers lose on diesel and cooking fuel sales. Their share to begin with was 33 percent of the revenue loss on fuel sales but has slowly risen to 40 percent.
The official said upstream firms had in 2011-12 made good 40 percent of the Rs 138,541 crore revenue that IOC, HPCL and BPCL lost on fuel sales.
Their Rs 55,000 crore contribution that year compared to Rs 30,297 crore in 2010-11 and Rs 14,430 crore in 2009-10.
In 2011-12, government gave out Rs 83,500 crore by way of cash subsidy, up from Rs 41,000 crore in 2010-11 and Rs 26,000 crore in 2009-10, he said.