Business Daily from THE HINDU group of publications
Thursday, Jun 11, 2009
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Business Daily from THE HINDU group of publications Thursday, Jun 11, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Petroleum Industry & Economy - Petroleum
Oil companies predict a loss of Rs 2.30 a litre on diesel Loss on petrol estimated to rise to Rs 5 a litre. Cooking gas or LPG tipped to go up to Rs 85. 
Murali Gopalan Mumbai, June 10 As world crude prices continue to climb, Indian oil refiners are concerned that the annual losses (or under-recoveries) on sale of petrol, diesel, kerosene and cooking gas could touch Rs 40,000 crore during the next fortnight. The projected losses on these subsidised fuels at the beginning of this fiscal were in the region of Rs 15,000 crore but increased to Rs 23,000 crore on June 1. “We are now certain that this figure will nearly double to Rs 40,000 crore in the coming days and can only hope that it does not go beyond Rs 50,000 crore,” an oil industry executive told Business Line. The bad news is that even the paltry profits on diesel will now be history with oil companies predicting a loss of Rs 2.30 a litre instead by end-June. Petrol was in the negative at Rs 3.70 a litre and losses are estimated to rise further to reach Rs 5/litre. Cooking gas, or LPG, was “slightly manageable” at Rs 70 a cylinder but again tipped to go up to Rs 85. “Under-recoveries on kerosene are currently in the region of Rs 12 a litre and may not move significantly upwards,” the executive added. In a nutshell, all this only means that the Centre will not be inclined to consider any move to deregulate prices because the customer will just end up burning a hole in his wallet. Global crude prices on Wednesday were $71 a barrel and inching towards the $75-mark which, in any case, was the outward limit for the Petroleum Ministry as far as freeing of prices was concerned. The silver lining in the cloud is that things are a lot better now than the first half of last fiscal when crude prices globally were closer to the $150/barrel mark and annual projected losses were in the region of Rs 250,000 crore. The refining trio of Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation found themselves in the midst of a severe liquidity crunch and ended up borrowing over Rs 100,000 crore combined in the process. The interest on these borrowings was one of the biggest burdens in their books for 2008-09 and impacted net profits significantly. This time around, the companies are hoping that the Centre would be more proactive to their requirements and increase prices of petrol, diesel and cooking gas should the need arise. “There were political compulsions last year which led to a delayed reaction. We are keeping our fingers crossed that better wisdom prevails this time and timely price hikes are implemented,” an oil sector official said. This will also save the Centre the process of issuing oil bonds all over again, as was the case in 2008-09. Oil sector looks to free pricing of petrol, diesel Oil bonds for Rs 10,000 cr issued to 3 oil marketing cos Oil Ministry seeks Rs 13,000-cr bonds for Q4 More Stories on : Petroleum | Petroleum | Bharat Petroleum Corporation Ltd | Hindustan Petroleum Corporation Ltd
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