Pratim Ranjan Bose

Kolkata, April 19

UNDER-RECOVERY on account of subsidised LPG and kerosene and price under-realisation on account of petrol and diesel have taken an abnormal toll in 2005-06.

During the first fortnight of April, the oil marketing PSUs have lost a total of Rs 1,300 crore on both counts.

Of the total, IOC took a hit of close to Rs 650 crore. HPCL and BPCL each lost in the range of 300 crore.

While non-revision of prices of petrol and diesel even in the face of unprecedented crude price rise was a major reason for under-realisation, the loss was further inflated due to the additional excise burden and the 50 paise cess.

It may be mentioned that Indian crude import prices crossed $50 a barrel during the first week of April compared to $30 during the same period in the previous year.

IOC, the largest oil marketing company, had suffered a total loss of Rs 8,418 crore in 2004-05, of which Rs 7,332 crore was due to under-recovery and Rs 1,086 crore due to under-realisation.

"While we had accepted under-recovery on LPG and kerosene as a fait accompli, under-realisations are much higher so far," said an IOC official.

The company has lost close to Rs 300 crore due to under-realisation in the first fortnight.

Sources in HPCL and BPCL confirmed under-realisation to the tune of Rs 140-150 crore each.

According to Mr Sarthak Behuria, Chairman of IOC, non-revision of production prices after November last year and the excise and cess all put together has led to under-realisation of close to Rs 5.50 paise per litre in HSD and a little below Rs 5 in petrol.

(This article was published in the Business Line print edition dated April 20, 2005)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.