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Our Bureau

New Delhi, July 18 The Petroleum Ministry is understood to have approached the Finance Ministry seeking fiscal measures to compensate the State-owned oil marketing companies for selling petroleum products below cost.

Indications are that Petroleum Minister Mr Murli Deora discussed the issue with Finance Minister Mr P. Chidambaram today.

With the surge in crude oil prices, State-owned oil marketing companies like IOC, HPCL and BPCL are losing close to Rs 180 crore every day on sale of petrol, diesel, PDS kerosene and domestic cooking gas.

They are suffering revenue loss of Rs 5.90 a litre on petrol, Rs 4.80 on diesel, Rs 14.65 on kerosene and Rs 189.15 per LPG cylinder.

The Ministry is seeking oil bonds worth Rs 19,000 crore to absorb a third of the impact of the surge in international oil prices.

An equal amount of Rs 19,000 crore would be shared by the upstream companies by way of discount of crude oil they sell to refiners, while the rest would be absorbed by retailers and consumers.

The Petroleum Ministry has been maintaining that no decision has been taken as yet and that consultations are going on.

Under-realisation on fuel sale is anticipated to amount to Rs 55,000 crore in 2007-08.

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