The country's largest oil firm, Indian Oil Corporation will lose about Rs 392 crore (Rs 3.92 billion) in the first half of November on selling diesel and LPG despite a steep hike announced last week.

"The hike of Rs 2.10 per litre in diesel price is only half of the actual hike needed to cover the increase in cost. We will lose Rs 190 crore (Rs 1.9 billion) on diesel in the first fortnight of November," a senior IOC official said.

For the remaining part of 2004-05, IOC's loss on diesel sale would be Rs 1300 crore (Rs 13 billion) if there is no further hike in the retail selling price.

IOC commands half of the auto fuel and LPG market share and losses for the industry are roughly double that of IOC.

The official said the Rs 20 per cylinder hike in LPG price would only give Rs 40 crore (Rs 400 million) a month and the company stood to lose Rs 202 crore (Rs 2.02 billion) in the first fortnight of November.

"A hike of Rs 158.15 per cylinder was needed in LPG price but only a marginal Rs 20 per cylinder has been allowed. Selling LPG to domestic consumers is an economically unviable proposition," he said.

IOC, which lost Rs 4300 crore (Rs 43 billion) on selling LPG and kerosene below cost in the first seven months of current fiscal, would clock another Rs 4800 crore (Rs 48 billion) loss in the remaining part of 2004-05.

The company had lost Rs 1600 crore (Rs 16 billion) in April-October because of the freeze on raising petrol and diesel prices.