State-owned Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp are losing about Rs290 crore a day in revenues on selling diesel, domestic LPG and kerosene below the imported cost.
Oil minister Murli Deora has sought a meeting with finance minister Pranab Mukherjee to discuss precarious finances of state-owned oil firms, as crude oil appears to be inching towards the $100 per barrel mark.
"I have requested the finance minister for a meeting tomorrow," Deora said from Mumbai.
Officials, however, said the meeting has so far not been fixed.
State-owned Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp are losing about Rs290 crore a day in revenues on selling diesel, domestic LPG and kerosene below the imported cost.
The state firms last week raised petrol price by Rs2.50 to 2.54 a litre but are still losing Rs1.20-1.22 per litre as the hike was insufficient to cover for crude oil that is touching $92 per barrel.
Besides, they are losing Rs7.65 a litre on diesel, Rs19.60 a litre on kerosene and Rs366.28 per 14.2-kg cylinder.
The three firms are projected to lose Rs73,600 crore in revenues during the 2010-11 financial year, 55% of which Deora wants the finance ministry to meet by way of cash from the central budget.
Deora said he had on January 8 met Mukherjee to seek immediate release of Rs10,000 crore in interim compensation to state oil companies.
So far, the finance ministry has committed to make up only one-third of the revenue losses from the budget.
"The finance minister has been kind enough to sanction Rs13,000 crore to cover part of under-recoveries in the first half of the current fiscal. I requested him to release another Rs10,000 crore for third quarter under-recoveries immediately to help PSUs post decent Q3 results," Deora said.
Without government subsidy, HPCL and BPCL are sure to report net loss in the October-December quarter and IOC too may end the three months in red.
The government had in 2008-09 given Rs71,292 crore, out of the Rs 103,292 crore total revenue loss on selling fuel below cost. "This was 69% of the total under-recovery. During the current fiscal, which has also seen hardening of crude prices, we are seeking just 55%," Deora said.
Besides discussing the compensation for the revenue loss, Deora may also raise the issue of cutting customs duty on crude oil to nil from 5 per cent currently to avoid further increase in retail prices.
He may also want the customs duty on diesel slashed to 2.5% from 7.5% at present, along with a reduction in the specific duty imposed on the most-consumed fuel in the country, a hike in prices of which would have cascading effect on already high inflation.
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