State-owned oil firms companies lose a whopping over Rs 1,80,000 crore on fuel sales this fiscal if domestic retail prices are not hiked in step with the cost of raw material.
Indian Oil, Bharat Petroleum and Hindustan Petroleum will "at current international crude oil prices lose Rs 180,208 crore in revenues on selling diesel, domestic LPG and kerosene below their imported cost in 2011-12 fiscal", an industry official said.
The revenue loss, termed as under-recovery by oil firms, will be the highest ever, even more than what they lost in 2008-09 when crude touched a record high of USD 147 a barrel.
The three oil firms now lose a record Rs 18.19 per litre on diesel, Rs 29.69 a litre on kerosene and Rs 329.73 per 14.2 kg domestic LPG cylinder.
In addition, they lose about Rs 7.50 per litre on petrol, whose rates have not moved in tandem with the imported cost despite its pricing being freed from the government control in June last year.
"Losses on petrol are not included in the under-recovery figures for 2011-12 as it is a decontrolled commodity," the official said.
The basket of crude oil India buys had averaged USD 83.57 per barrel in 2008-09 and calculations for the current fiscal have been done at the prevailing rates of around USD 110 a barrel.
"The average price of Indian basket of crude oil last fiscal was USD 85.09 per barrel, higher than the 2008-09 average when the government had cut customs and excise duty on crude oil and products to check the impact of rising international rates on domestic markets," the official said.
Finance Minister Pranab Mukherjee has refused to cut customs and excise duty on crude this time to protect his projected fiscal deficit.
"The situation in the current fiscal will be worse, the three PSU oil marketing companies are losing Rs 540 crore per day on diesel, domestic LPG and kerosene sales," he said.
In 2008-09, the government had issues oil bonds worth Rs 71,292 crore to the three firms to make up for more than two- thirds of the Rs 103,292 crore revenue loss. Upstream oil firms like ONGC provided another Rs 32,000 crore.
In the 2010-11 fiscal, the three firms lost Rs 78,202 crore, but so far the government has provided only Rs 20,911 crore in compensation. The oil marketing firms lost Rs 2,227 crore on selling petrol below imported cost during April and June before its price was freed