Oil cos making Rs 10 a litre profit on petrol, Rs 6.5 loss on diesel

Oil companies are selling petrol at a profit of Rs 10 per litre but retail prices haven’t been reduced as they recoup past losses and make up for a Rs 6.5 a litre loss on diesel, a report said. State-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) have for the past 15 months not revised petrol and diesel prices in line with the cost. They have times of low oil prices to recoup losses incurred when rates were high.

“Post record high losses of Rs 17.4 per litre on petrol and Rs 27.7 a litre diesel for the week ended June 24, 2022, margins for petrol are estimated at a positive Rs 10 per litre for Q3 (October-December 2022) while diesel losses too have likely narrowed to Rs 6.5 a litre for the same quarter,” ICICI Securities said in a report.

The three fuel retailers haven’t changed petrol and diesel prices since April 6, 2022, despite input crude oil prices rising from USD 102.97 per barrel that month to USD 116.01 in June and falling to USD 78.09 this month.

Holding prices when input cost was higher than retail selling prices led to the three firms posting net earnings loss. They posted a combined net loss of Rs Rs 21,201.18 crore during April-September despite accounting for Rs 22,000 crore announced but not paid LPG subsidy.