After a long spell of over an year, the three state-owned oil companies?IOC, BPCL and HPCL?will again start making profits on sale of petrol by over Rs 4 a litre from November 1. However, a fuel price cut still seems far off as the oil companies continue to lose over Rs 155 crore per day on sale of diesel, domestic LPG and kerosene.

?Margins on petrol will turn positive tomorrow (on Saturday). Based on the average oil price of second fortnight of October, we expect to make Rs 4.12 a litre margin, IOC chairman Sarthak Behuria said. Asked if this would mean a cut in retail prices of petrol, Behuria said the margins on the three other fuels (diesel, LPG and kerosene) continue to be negative and any reduction in domestic prices at this stage will be detrimental to the oil companies.

?Losses on diesel will come down to Rs 0.96 per litre. On kerosene we continue to lose Rs 22.40 per litre and on LPG the losses stand at Rs 343.49 per cylinder,? he said adding that the margins till Friday (October 31) were based on the average oil price of first fortnight of October and those from Saturday (November 1) it would be based on average of second fortnight of October.

?IOC continue to lose Rs 85 crore per day on sale of diesel, kerosene and LPG. We will make about Rs 6 crore on petrol but overall our losses on fuel sales stand at Rs 79 crore per day,? said IOC Director (Finance) S V Narasimhan, adding that the industry would make Rs 155 crore loss per day on fuel sales.

Behuria said there was no case for a cut in fuel prices till the losses existed. ?It is too early for passing on any softening in international oil prices. Firstly, we need to look at the monthly average before deciding if we have broken even on all products. Plus, there has to be cross-subsidy, somebody has to pay for selling LPG and kerosene below cost.?

?What benefit to pass on to whom? Already consumers are protected. You never said the prices should be raised to market level when oil touched $147 per barrel,? he retorted.

Behuria said IOC, BPCL and HPCL till today were selling petrol at a loss of Rs 2.85 per litre, diesel at Rs 7.26, kerosene at Rs 29.19 per litre and LPG at a loss of Rs 335 per cylinder. ?Look at our losses in second quarter. The current compensation mechanism is grossly inadequate,? he said.

Government compensates the three refiners for half of their revenue loss on sale of petrol, diesel, domestic LPG and kerosene below the production cost by way of oil bonds. Another one-third of the losses are met by companies like ONGC and OIL by way of discounts on crude oil they sell to them.?But when the gross revenue loss (before oil bonds and upstream assistance) is too large, the refiners do not have the ability to absorb the uncovered portion,? Behuria said demanding that the Government make good of the uncovered portion of revenue loss through increase in quantum of oil bonds.

Petroleum minister Murli Deora had yesterday met finance minister P Chidambaram seeking enhancement in the quantum of oil bonds. The Finance Minister had asked him come back with exact losses before deciding on the issue.

Behuria said after the June price hike and duty regig, IOC, BPCL and HPCL were saddled with Rs 2,20,000 crore of revenue loss for the fiscal. This has come down to about Rs 1,40,000 crore because of softening in international oil prices but the companies did not have the ability to absorb the portion left uncovered after issue of oil bonds and upstream assistance.

IOC net declines 7,047 cr

IOC posted its largest ever net loss of Rs 7,047.13 crore in July-September quarter. BPCL on Thursday posted a net loss of Rs 2,625.17 crore in second quarter on top of Rs 1,066.70 crore in April-June. HPCL ended the Q2 with a net loss of Rs 3,218.92 crore net loss, thereby making the total losses of the three oil PSUs at close to Rs 13,000 crore in the second quarter ended September 30.

IOC posted losses in the second quarter despite receiving Rs 14,473.54 crore by way of discounts on purchase of crude oil and produced from companies like Oil and Natural Gas Corp (ONGC) and Oil India Ltd and Rs 25,082.38 crore by way of oil bonds from the government. Chairman and managing director, IOC Sarthak Behuria said the net sales or income from operations has grew by 50 %to Rs 74,322.01 crore in July-September quarter on increased fuel sales.