August 31, 2013 / 16:24 IST
Battling double whammy of dipping rupee and surging global oil rates, Oil Minister M Veerappa Moily has written to Prime Minister Manmohan Singh saying without corrective steps losses on sale of subsidised fuel sales will rise to unprecedented Rs 1,80,000 crore. In a detailed note, Moily told Prime Minister that rupee has dropped from Rs 54.45 to a US dollar in 2012-13 to Rs 68.36, raising cost of importing oil.
Also Read: Invest aggressively in OMCs now; top pick BPCL, says Macquarie"If the present position persists, the total under-recovery (revenue loss) would reach to a level of Rs 1,80,000 crore in the current financial year as compared to Rs 1,61,000 crore during 2012-13," he wrote to Prime Minister on August 30. Losses on diesel sales at government-controlled rates have widened to Rs 10.22 per litre from Rs 9.29 a litre at the beginning of the month and less than Rs 3 per litre in May, even as prices are raised by 50 paise a litre every month.Besides, the oil companies lose Rs 33.54 per litre on kerosene and Rs 412 per 14.2-kg cooking gas (LPG) cylinder. "It is estimated that every one rupee depreciation of Indian rupee against US dollar increases the under-recovery (loss) of the public sector oil marketing companies on sale of diesel, PDS kerosene and domestic LPG by about Rs 7,900 crore per annum," he said in the note. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
