State-owned Indian Oil Corp (IOC) is losing Rs. 118 crore a day in revenue on selling diesel, domestic LPG and kerosene below their imported cost, a company official said on Tuesday.

“We are losing very heavily on diesel after international oil prices firmed up to $90 a barrel,” he said.

Oil prices have risen as freezing weather in the northern hemisphere has increased energy demand for heating. The spurt has resulted in the difference between domestic retail and international benchmark prices widening.

While the government deregulated petrol prices in June this year, state-owned firms continue to sell diesel, domestic LPG and kerosene below cost to keep inflation in check.

The nation’s largest fuel retailer is losing Rs 57 crore per day on diesel alone, while the loss on kerosene and domestic LPG is Rs 31 crore and Rs 30 crore, respectively, he said.

IOC is losing Rs 6.09 per litre of diesel, Rs 17.72 per litre of kerosene and Rs 272.19 per 14.2-kg domestic LPG cylinder.

“For the full fiscal, at the current level of international oil prices, IOC will lose Rs 37,815 crore in revenues,” the official said.

Cumulatively, IOC and the two other state-owned oil marketing companies, Hindustan Petroleum Corp (HPCL) and Bharat Petroleum Corp (BPCL), are projected to lose Rs 68,361 crore in revenue on subsidised fuel sales in the full 2010-11 fiscal.

A meeting of the Empowered Group of Ministers (EGoM) on fuel pricing is unlikely to take place on Wednesday as previously anticipated due to the absence of a couple of members of the grouping.

A Rs 2 per litre hike in diesel prices was on the agenda for the EGoM meet, an industry source said.

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