"Owing to non-revision in domestic consumer prices in line with international prices of PDS kerosene, domestic LPG, diesel and petrol during the first half of current fiscal year, April-September 2004, oil marketing companies estimate their under-recoveries at around Rs 9800 crore," he said.
Aiyar said while the government was providing Rs 0.82 per per litre subsidy on kerosene, the oil companies were bearing a loss of Rs 7.05 on sale of a litre of kerosene.
Similarly on domestic cooking gas LPG, oil firms suffered a loss of Rs 113.03 per cylinder as against Rs 22.58 per cylinder subsidy provided by the government.
"As per current policy, the government subsidy on these two products is to be phased out over a period of five years effective April 1, 2002. So the government subsidy would be available up to March 31, 2007," he said.
Aiyar said Indian Oil Corp, country's largest oil firm, reported a 31.3 per cent drop in its net profit in April-September due to under recoveries on sale of kerosene and LPG and reduced market margins on the sale of petrol and diesel due to non-revision of domestic prices in line with the international prices of these products.