International oil prices have hit a six-month low, helping Indian fuel retailers breakeven on petrol but they continue to lose money on diesel – the most used fuel in the country, officials said. The world’s best-known crude benchmark, Brent was trading at USD 94.91 per barrel on Thursday after concerns of a global recession led to it slipping to a six-month low of USD 91.51 on the previous day. The current rates are a relief to India, which is 85 per cent dependent on imports for meeting its oil needs. The fall in prices has meant that fuel retailers such as Indian Oil Corporation are now breaking even on petrol but there are some losses on diesel, officials with knowledge of the matter said.

State-owned fuel retailers IOC, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) have not exercised their right to adjust the retail selling price of petrol and diesel in line with the international costs for four and half months now to help the government manage runaway inflation.

At one point, they were losing ?20-25 per litre on diesel and ?14-18 a litre on petrol as international oil prices soared. These losses have been trimmed with the fall in oil prices. “There are no under-recovery (losses) on petrol now. For diesel, it will take some time to reach that level,” an official said.

But this is unlikely to translate into an immediate reduction in rates as oil companies will be allowed to recoup losses they had accumulated on selling fuel at below cost in the last five months, another official said. Under-recovery on diesel is now down to Rs 4-5 a litre. IOC, BPCL and HPCL are supposed to revise the retail price of petrol and diesel daily in line with cost. But they froze rates for a record 137 days beginning November 4, 2021, just as states like Uttar Pradesh went to polls.

Source: PTI