Oil companies are losing Rs 725 cr daily on fuel sales
June, 04th 2008
The government has been deliberating on measures over oil prices through the last fortnight.
Meanwhile, the companies' losses rose from Rs 16.34 a litre to Rs 21.43 on each litre of petrol, Rs 23.47 to Rs 31.58 on diesel, Rs 28.72 to Rs 35.98 on kerosene and Rs 305.90 to Rs 352.90 per 14.2-kg cylinder of cooking gas. Together, the three firms are losing Rs 725 crore daily on fuel sales, up from Rs 580 crore.
In this scenario, even the proposed quantum of price rise will be totally ineffective in tackling the companies' plight unless these are accompanied by duty concessions.
And therein lies the catch, with petroleum minister Murli Deora and finance minister P Chidambaram differing on the measures.
While Deora is pushing hard for duty relief to limit the price shock to consumers in a poll-packed year, Chidambaram has been steadfastly refusing to disturb the duty regime.
The mix of crude oil that India buys averaged $124.02 per barrel in the second fortnight of May against $115.09 in the first fortnight.
The Indian basket was at $67 per barrel in February when petrol and diesel price were raised by Rs 2 and Re 1 a litre respectively. At prevalent global oil price range of $100-130 a barrel, Indias oil subsidy bill may shoot up three times to 2.2% of the GDP this year.