Petrol price cut by 95 paise
rates in line with the cost. However, prices have seldom moved in line with cost and oil companies buckled under political pressure to keep rates checked to help the government manage inflation.
IOC and other state retailers, Hindustan Petroleum and Bharat Petroleum, lost over Rs 2,000 crore on selling petrol below cost during the first six months of current fiscal. And since the product is deregulated, there will be no subsidy support from the budget to cover these losses.
"It may be noted that oil marketing companies are bearing the burden of a loss of over Rs 2,000 crore on sale of petrol during April-September 2012 due to inability to change retail selling prices to the desired extent in line with market conditions," IOC said.
Besides petrol, fuel retailers sell diesel, domestic LPG and kerosene at heavy losses.
IOC said oil firms were losing Rs 9.84 a litre on diesel, Rs 31.30 a litre on kerosene sold through PDS and Rs 478.50 per 14.2-kg cooking gas cylinder supplied to households.
"Projected under-recovery (revenue loss) on these products is expected to cross Rs 160,000 crore for the current year," it added.
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