The Centre’s delay in making good the losses incurred on cooking gas and kerosene for this fiscal has only increased the borrowing burden on the public sector refining trio of IndianOil, Hindustan Petroleum Corporation and Bharat Petroleum Corporation.

Industry sources told Business Line that the combined figure has now crossed the Rs 1,00,000-crore mark. As on March 31, 2009 the figure was Rs 88,898 crore, which, incidentally, was higher than Rs 67,332 crore on the same day of 2008.

The surge last fiscal was because this was when crude had touched the USD 147 per barrel (bbl) mark at one point and the three refiners were severely cash-starved.

In contrast, 2009-10 has not been as dramatic with crude prices actually tame in April and May at around USD 40/bbl till they began increasing gradually to the current levels of USD 78. However, the oil majors have suffered because the Centre has not compensated them for losses incurred on kerosene and cooking gas since April.

In the case of IOC, the dues for the April-September period total Rs 7,135 crore with HPCL following at nearly Rs 2,443 crore and BPCL at the third spot with Rs 2,206 crore. All in all, losses on kerosene and cooking gas for the trio come to Rs 11,784 crore for the first half of this fiscal alone.

As a result, both HPCL and BPCL incurred losses in the second quarter of this fiscal while IOC reported a profit of around Rs 285 crore.

What helped the three companies was the good showing in the preceding quarter, when crude prices were a lot more benign, which helped them post profits for the first half period. It is this delay in issuing oil bonds for kerosene and cooking gas losses that has prompted the refiners to borrow more this fiscal largely to meet their working capital needs.

The silver lining in the cloud is that the upstream sector comprising theOil and Natural Gas Corporation, Oil India and GAIL (India) have made good the refiners’ losses incurred on petrol and diesel in both quarters of this fiscal totalling a little over Rs 4,000 crore.

Two months into the third quarter and there is still no indication when the bonds are going to come through. Crude prices are not likely to go below the USD 70 a barrel mark and experts believe that they could cross USD 90 by January.

Estimates are that kerosene and cooking gas losses could touch Rs 10,000 crore in the third quarter alone which means the compensation package for these two fuels would be closer to Rs 22,000 crore for April-December 2009.