The positive margins recorded by the public sector oil marketing companies in the last few months will come down to from Rs 7.50 to Rs 2.50 for a litre of petrol and from Rs 2.50 to Rs 0.60 on a litre of diesel, net of taxes. This is due to the price cut announced by the Government. The revenue loss incurred on domestic LPG will go up by Rs 58 a cylinder.
The reduction in petrol price by Rs 5 a litre, diesel by Rs 2 litre and domestic LPG by Rs 25 for every 14.2-kg cylinder would mean that overall under-recoveries for the OMCs would go up by Rs 1,640 crore this fiscal.
The public sector OMCs — Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation, which have been incurring revenue losses, had started making positive margins on petrol sales from November 2008 and on diesel from December. They, however, continued to incur losses on domestic LPG and kerosene sold under the public distribution system.
“It was first time in almost two-and-a-half years that the companies had started making positive margins on petrol and diesel. Besides, any upward movement in international crude prices would mean the companies again incurring revenue loss on the two products,” sources said.
The current fiscal has witnessed unprecedented volatility in international oil prices. While the price at which India buys its crude oil soared to $142 a barrel on July 3, 2008, it plummeted to $35.83 a barrel on December 24. However, the average price of the Indian crude basket this fiscal till January 29 is still high, at $91.89 a barrel from the previous year’s average of $79.35.
The reduction in petrol price by Rs 5 a litre, diesel by Rs 2 litre and domestic LPG by Rs 25 for every 14.2-kg cylinder would mean that overall under-recoveries for the OMCs would go up by Rs 1,640 crore this fiscal.
The public sector OMCs — Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation, which have been incurring revenue losses, had started making positive margins on petrol sales from November 2008 and on diesel from December. They, however, continued to incur losses on domestic LPG and kerosene sold under the public distribution system.
“It was first time in almost two-and-a-half years that the companies had started making positive margins on petrol and diesel. Besides, any upward movement in international crude prices would mean the companies again incurring revenue loss on the two products,” sources said.
The current fiscal has witnessed unprecedented volatility in international oil prices. While the price at which India buys its crude oil soared to $142 a barrel on July 3, 2008, it plummeted to $35.83 a barrel on December 24. However, the average price of the Indian crude basket this fiscal till January 29 is still high, at $91.89 a barrel from the previous year’s average of $79.35.
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