Public sector oil companies have for the first time in more than a year started making profit on sales of petrol and diesel, strengthening the case for a fuel price cut soon.

But the oil companies do not want to reduce prices now as they continue to lose Rs 82 crore per day on PDS kerosene and domestic LPG.

Indian Oil, Bharat Petroleum and Hindustan Petroleum, who started making profit on sales of petrol from November 1, have now broken even on diesel sales, an industry official said.

With international crude oil prices sliding further on falling demand as major economies slow down, the three firms are making a net 70 paise per litre profit on sales of diesel while they earn Rs 9.86 per litre extra on selling petrol above the imported cost.

Based on the average international oil prices in the first fortnight of November, the state-run firms are earning a margin of Rs 16 crore per day on petrol and Rs 5 crore a day on diesel.

However, they continue to lose on kerosene sold through ration shops and domestic LPG. Kerosene is being sold at a loss of Rs 22.40 a litre and LPG at Rs 343.49 per cylinder.

The fall in international oil prices will result in lower revenue loss on fuel sales this fiscal. IOC, BPCL and HPCL will end the 2008-09 fiscal with Rs 122,710 crore revenue loss, Rs 92,853 crore of which has already been accounted for in the first half of the fiscal.

The official said oil companies wanted to use gains on sales of petrol and diesel to make good part of the loss on kerosene and LPG sales. "Reducing petrol and diesel prices now will wipe away this golden opportunity."