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The loss on sale of diesel has fallen to Rs 4.41 per litre, helped by Rs 1.09 a litre hike and strengthening of the rupee against the US dollar.
State-owned firms Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp are losing Rs 4.41 on every litre of diesel sold, down from Rs 6.80 a litre in first half of the month, according to Oil Ministry calculations.
The loss, which is made good through government subsidy, has been on a declining trend since March when it stood at Rs 8.37.
The oil firms, which skipped in April the monthly hike of 40-50 paise a litre that the Cabinet had decided in January last year for wiping out the losses, raised rates by Rs 1.09 a litre soon after the polling to elect a new government ended on May 12.
Besides, the prospects of the BJP-led NDA forming the government with full majority helped strengthened rupee as foreign inflows increased on improved market sentiment, cutting down losses.
According to the oil ministry data, the rupee appreciated to Rs 59.47 to a US dollar in the first half of May (based on which the current desired selling prices and the gap between it and retail price is calculated) from Rs 60.54 in the second fortnight of April.
Besides diesel, oil firms are losing Rs 33.84 a litre on kerosene sold through the public distribution system, down from Rs 34.43 a litre last month. On cooking gas (LPG), the revenue loss has come down to Rs 449.13 per 14.2-kg cylinder from Rs 506.06 last month.
Diesel prices had risen by a cumulative Rs 8.33 a litre in 14 instalments before the May 12 hike since the Cabinet move last year.
Oil marketing companies, effective April 16, 2014, are now incurring combined daily under-recovery (revenue loss) of Rs 318 crore on the sale of diesel, PDS kerosene and domestic LPG. This is lower than Rs 342 crore daily under-recovery during previous fortnight, it said.
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