Battling double whammy of dipping rupee and surging global oil rates, Oil Minister M Veerappa Moily has written to Prime Minister Manmohan Singh saying without corrective steps losses on sale of subsidised fuel sales will rise to unprecedented Rs 1,80,000 crore.
In a detailed note, Moily told Prime Minister that rupee has dropped from Rs 54.45 to a US dollar in 2012-13 to Rs 68.36, raising cost of importing oil. "If the present position persists, the total under-recovery (revenue loss) would reach to a level of Rs 1,80,000 crore in the current financial year as compared to Rs 1,61,000 crore during 2012-13," he wrote to Prime Minister on August 30.
Losses on diesel sales at government-controlled rates have widened to Rs 10.22 per litre from Rs 9.29 a litre at the beginning of the month and less than Rs 3 per litre in May, even as prices are raised by 50 paise a litre every month.
Besides, the oil companies lose Rs 33.54 per litre on kerosene and Rs 412 per 14.2-kg cooking gas (LPG) cylinder. "It is estimated that every one rupee depreciation of Indian rupee against US dollar increases the under-recovery (loss) of the public sector oil marketing companies on sale of diesel, PDS kerosene and domestic LPG by about Rs 7,900 crore per annum," he said in the note.