Bharat Petroleum Says Losing Marginally From Selling Gasoline Below Cost

Bharat Petroleum Corp., India’s second-largest state refiner, is losing marginally from selling gasoline below cost and as much as 2 rupees a liter on diesel sales, an official said.

“There is a marginal deficit on petrol and we are free to revise prices whenever we want,” Finance Director S.K. Joshi said by telephone from Mumbai today. “We will take a call at an appropriate time.”

India freed gasoline prices from government control in June and plans to eventually allow state refiners, including Indian Oil Corp., the nation’s biggest, to set diesel rates. Auto fuel prices haven’t been revised since then and refiner shares gained in Mumbai trading on speculation the government is close to freeing diesel prices.

“The share movement is factoring in diesel deregulation because of falling crude prices,” said Rohit Ahuja, a Mumbai- based analyst with Centrum Broking Ltd. “If the government doesn’t free diesel now, the shares will probably reverse their movement.”

Bharat Petroleum and Indian Oil climbed to a record in Mumbai trading, while the benchmark Sensitive Index fell 1.3 percent. Bharat Petroleum rose 1.7 percent to 776.40 rupees and had their biggest gain in nine weeks.

Indian Oil rose 1.6 percent to 410.25 rupees and Hindustan Petroleum Corp. gained 1.2 percent to 531.80 rupees.

Bharat Petroleum hasn’t heard from the government about increasing diesel prices, Joshi said.

Crude oil has declined 7 percent since June 25, when gasoline was freed and prices of diesel, kerosene and cooking gas were increased. Lower global oil prices reduce revenue losses for state refiners, which sell fuels below cost to help curb inflation.

Crude oil for October delivery dropped as much as 49 cents, or 0.7 percent, to $72.87 a barrel in electronic trading on the New York Mercantile Exchange and was at $73.45 at 11:30 a.m. in London.

To contact the reporter on this story: Rakteem Katakey in New Delhi at rkatakey@bloomberg.net.

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