The Hindu Business Line : Crude basket at $57.8/barrel

Softer note
The Indian basket from April 2006 to date averaged at $64.39 per barrel.
The December (to date) average stood at $60.35 per barrel.

New Delhi , Jan. 2

After touching a high of over $70 a barrel, the Indian crude basket closed the year at a much softer note at $57.79 a barrel on December 29.

The international crude prices were hovering around $60 per barrel. The Indian basket from April 2006 to date averaged at $64.39 per barrel.

The December (to date) average stood at $60.35 per barrel. With the downward trend in oil prices effective October 2006, the under recoveries suffered by the oil marketing companies (OMCs) also came down.

Losses down

The loss suffered by Indian Oil Corporation Ltd on sale of petroleum products — petrol, diesel, kerosene under public distribution system and liquefied petroleum gas is now close to Rs 50 crore per day compared to Rs 110 crore per day, which the company was incurring earlier.

Under recoveries are the difference between retail price based on trade parity and price actually charged from the consumer on the petroleum products.

Good sales revenue

According to analysts, October and November proved to be good months for the oil retailing companies in terms of sales revenue on petrol and diesel. However, the positive trend of October and November on sales of petrol and diesel was again reversed in December despite the softening of crude prices, industry sources said.

December saw the companies once again incurring under recoveries on the petroleum products despite softening of crude prices mainly due to reduction in retail selling price of petrol and diesel announced by the Government on November 29. The Government had reduced retail selling price of petrol by Rs 2 per litre and diesel by Re 1 per litre, when the Indian basket was at $59.64 a barrel.

Retail selling price

In November, on petrol sale the retailing companies had started making an over realisation (profit) of Rs 4.68 per litre. However, this came down to Rs 1.67 per litre in the first fortnight of December. Currently, the desired increase in retail selling of petrol is 25 paise per litre, according to industry sources. The current retail selling price at Delhi was Rs 44.85 per litre.

The loss incurred on sale of diesel came down to about 40 paise a litre during November, which has now again climbed up to about Rs 1.40 per litre. On sale of subsidised kerosene and cooking gas, the companies continued to suffer heavy under recoveries of Rs 15 per litre and Rs 150 per cylinder, respectively, as there was no increase in the retail selling prices of these two products in past few years.

On the domestic oil product sales front, as per data available, sales rose 12.6 per cent in November from a year earlier. Domestic sales are the best way to measure oil demand. Sales went up to 10.11 million tonnes (mt) in November. In volume terms, oil product consumption is at its highest since March, when India consumed 10.18 mt.