State-owned oil firms may have to raise petrol prices by as much as Rs 3 per litre as the rupee touched two-year low against the US dollar, increasing the cost of importing crude oil.
“Oil retailers are losing Rs 2.61 per litre or Rs 15 crore per day on sale of petrol. Together with local taxes, the hike needed to level domestic rates with international prices is about Rs 3 per litre,” a top government official said.
IOC, BPCL and HPCL have lost Rs 2,450 crore this fiscal on selling petrol, whose rates were freed from government control in June last year, below the cost.
“At current rate, oil firms will accrue another Rs 2,850 crore of loss on sale of petrol, taking the total loss on a fuel that was freed from control, to Rs 5,300 crore for the full fiscal,” the official said, adding, “Oil firms will have to take a call on raising petrol price soon.”
Besides petrol, the three firms are losing Rs 263 crore per day on selling diesel, domestic LPG and kerosene below cost. Diesel is being sold at a subsidy of Rs 6.05 a litre, kerosene at Rs 23.25 per litre while domestic LPG rates are under-priced by Rs 267 per 14.2-kg cylinder.
“The industry lost around Rs 65,000 crore in the first half of the current fiscal on the three products and for the full year the revenue loss is estimated at Rs 121,571 crore at the price of Indian basket at USD 110 per barrel,” said the official.
Rupee fell to 48 per dollar today for the first time since September 2009. “Every rupee depreciation, the under- recovery (revenue loss) increases annually by around Rs 9,000 crore,” he said, underscoring the need for action on the price front on all the three products.
Indian Oil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) had last raised petrol price by Rs 5 a litre in May. Diesel, domestic LPG and kerosene price were hiked in June by Rs 3 per litre, Rs 50 per cylinder and Rs 2 per litre.
The government had in June last year decontrolled petrol price but continues to dictate diesel, domestic LPG and kerosene rates.