Indian Oil Firms Lose Rs 16 billion in 45 days of Post-APMe
State-run oil marketing companies Indian Oil Corp (BSE:IOC), Hindustan Petroleum (BSE:HPCL), Bharat Petroleum (BSE:BPCL) and IBP (BSE:IBP) have together lost about Rs 16 billion (US$327 million) in the first 45 days of dismantling of administered pricing mechanism from April 1 on account of selling products below the cost of crude.
Fortune 500 company IOC lost around Rs 7.25 billion from April 1 to May 15 while BPCL lost close to Rs 4.17 billion during the period, oil industry sources said.
India's 2nd largest oil refiner HPCL took a hit of Rs 3.27 billion in the period while standalone retailing company IBP lost Rs 1.28 billion as domestic product prices have not kept pace with rally in global crude oil prices.
State-run oil retailing companies are selling petrol at Rs 4 per litre loss and diesel at Rs 3.43 per litre loss as crude oil price has increased to over $25 per barrel as against the $20 a barrel budgeted at the time of last petroleum product price review, sources said.
The government has been pressing the refining and marketing companies to keep retail prices unchanged to ensure smooth transition from a controlled to a deregulated scenario.
According to estimates, oil companies have been losing Rs 2 billion a month for every $1 per barrel increase in global crude prices.
Oil companies have been pressing for a Rs 2.50-3.00 per litre hike in petrol and Rs 1.50 per litre in diesel prices and cut in excise duty on petrol from 32 per cent to 24 per cent and on diesel from 16 per cent to 12 per cent to offset the rise in crude prices.
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