Public sector oil companies are likely to incur a loss of Rs 50,000 crore (Rs 500 billion) in the current fiscal on selling fuel below cost, Indian Oil Corporation chairman Sarthak Behuria said on Tuesday.
"At current price level,
IOC is losing Rs 85 crore (Rs 850 million) a day on sale of petrol, diesel, LPG and kerosene," he told reporters in New Delhi.
Oil companies are selling petrol at a loss of Rs 5.24 a litre, diesel Rs 4.40 a litre, kerosene at Rs 14.67 a litre and LPG (cooking gas) at a loss of Rs 167 per cylinder.
"At current prices, we estimate that the under-recoveries for the entire industry during 2007-08 will be about Rs 50,000 crore," he said.
Petroleum Minister Murli Deora said United Progressive Alliance Chairperson Sonia Gandhi has clearly asked the government not to raise kerosene and LPG prices at any cost so as not to burden the common man.
"Our endeavour will be to keep the price li
ne unchanged," he said.
On under-recoveries, he said the previous year's formula of sharing the revenue losses between upstream companies, government and refining and marketing firms would continue.
ONGC,
Oil India Ltd and
GAIL will be asked to bear one-third of the under-recoveries and a similar amount will be provided by the government by way of bonds.
"We will shortly initiate discussions with finance ministry on issue of oil bonds," Deora said.
Behuria said the current fiscal was better than the previous year as refining margins were better. IOC is currently earning a margin of $9 to $10 on processing every barrel of crude oil compared to $4.5 to $5 last year.