Indian Oil Corp Losing Substantial Amounts on Fuel Sales

The steepest hike in petrol, diesel and domestic LPG prices notwithstanding, Indian Oil Corp (IOC) is losing us$96m (Rs 413 crore) per day on fuel sales.   "Last month's hike and cut in customs and excise duties were not sufficient to cover the gap between domestic retail price and cost of imported raw material (crude oil)," a senior company executive said.    

IOC and sister state-run firms Hindustan Petroleum and Bharat Petroleum are currently selling petrol at a loss of  .39cents (Rs 16.70) per litre, and diesel at .64cents ( Rs 27.61) a litre.    

"Our daily loss based on the average price of first fortnight of July was Rs 413 crore (us$96m). For the industry the figures would be close to Rs 800 crore($186m)" he said.    

But with firming up of crude oil prices, the gains from price hike and duty cuts have almost been washed away.   Government is reported to provide oil bonds valued Rs 94,000 crore to the three state firms to partly compensate them for selling fuel at below cost. However the deficit remains.

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