Losses on diesel climb to Rs 10.48 a litre

Losses on diesel sales have climbed to Rs 10.48 per litre after international oil rates inched up, the Oil Ministry said on Monday.

Under-recovery or revenue loss on diesel has risen to Rs 10.48 per litre from Rs 9.99 a litre in the first fortnight of December, an official statement said in New Delhi.

This followed marginal increase in gas oil rates in the international markets and rupee value falling from Rs 61.78 to a dollar to Rs 62.13.

Oil firms calculate the desired retail selling price of diesel on 1st and 16th of every month based on average international oil rate and the foreign exchange rate of the preceding fortnight.

"Oil marketing companies, effective December 16, are now incurring combined daily under-recovery of about Rs 434 crore

on the sale of diesel, public distribution system kerosene and domestic LPG.

"This is slightly more than Rs 429 crore (Rs 4.29 billion) daily under-recoveries during previous fortnight effective beginning December 1," the statement.

In the current financial year, diesel under-recoveries have varied from as high as Rs 14.5 per litre in mid-September to as low as Rs 3.5 in May.

It could take over one-and-half years to wipe out the Rs 10.48 a litre loss at the current rate of raising diesel price by 50 paise per litre.

The statement said fuel retailers Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation lost Rs 60,907 crore (Rs 609.07 billion) on sale of diesel, LPG and kerosene in the first half of current fiscal.

The total under-recoveries on diesel and cooking fuel in full fiscal could be around Rs 147,500 crore (Rs 1,475 billion).