State-run oil retailers lose Rs 600 cr per day on sales

Tue. August 05, 2008; Posted: 03:23 AM

New Delhi, Aug 04, 2008 (Asia Pulse Data Source via COMTEX) -- IOCOF | Quote | Chart | News | PowerRating -- Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum are together losing Rs 600 crore per day on fuel sales that has forced a severe liquidity problem and demands for immediately raising credit limits.

The state-run retailers are losing Rs 11.60 per litre on sale of petrol, Rs 23.23 a litre on diesel, Rs 39.55 per litre on kerosene and Rs 348.89 per 14.2-kg domestic LPG cylinder.

The three firms are together projected to lose Rs 2,05,740 crore in revenues this fiscal, official sources said.

The high daily losses have put pressure on day-to-day operations, forcing Petroleum Ministry to write to the Finance Ministry soliciting an immediate enhancement of the credit limit as they were in danger of exceeding their permissible limits for borrowings.

While HPCL has sought an additional credit limit of Rs 2,500 crore over the present limit of Rs 20,700 crore, BPCL has asked for Rs 3,000 crore more through enhancement of the present limit of Rs 22,500 crore to Rs 25,500 crore.

For IOC, the Finance Ministry has been requested to exclude Rs 20,000 crore committed for lending to the company's Paradip refinery project from the permissible single borrowers limit of 25-20 per cent of their capital funds, they said.

The situation has arisen as the oil companies have not got oil bonds for past quarters. Government makes up for half of the revenue loss on fuel sales through issue of oil bonds.

Bonds can be issued only after Parliament passes supplementary demands of grants, which may happen only in September, they said.

Petroleum Ministry has sought oil bonds worth over Rs 50,600 crore to part compensate state-run companies for selling fuel below the cost during the first half of 2008 calender year. The Ministry has sought Rs 14,956.17 crore as bonds for IOC, BPCL and HPCL for the last quarter of 2007-08 and an additional amount of Rs 35,672.70 crore for the first quarter of 2008-09 financial year, officials said.

For the 2007-08 fiscal, the total revenue loss on sale of petrol, diesel, domestic LPG and kerosene was put at Rs 70,579 crore.

Of this, 50 per cent is to be met through the issue of oil bonds and during April-December 2007 bonds worth Rs 20,333.33 crore have been issued and the Ministry has now sought Rs 14,956.17 crore for the January-March period.

For the April-June quarter, the revenue loss has been estimated at Rs 51,922.70 crore.

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