Falling Indian rupee, rising oil prices could create Rs1.8 trillion loss: Minister

India is battling a double whammy with the rupee falling, on the one hand, and oil prices rising on the other.

NEW DELHI: Indian, Oil Minister M Veerappa Moily has written to Prime Minister Manmohan Singh saying that unless corrective measures were taken, losses on the sale of subsidised fuel sales will rise to an unprecedented Rs1.8 trillion, according to The Economic Times.

In a detailed note, Moily told the Manmohan Singh that the Indian rupee has dropped from Rs54.45 to a US dollar in 2012-13 to Rs68.36, raising cost of importing oil.

"If the present position persists, the total under-recovery (revenue loss) would reach to a level of Rs1,80,000 crore in the current financial year as compared to Rs1,61,000 crore during 2012-13," he wrote to Indian Prime Minister on August 30.

Losses on diesel sales at government-controlled rates have widened to Rs10.22 per litre from Rs9.29 a litre at the beginning of the month and less than Rs3 per litre in May, even as prices are raised by 50 paise a litre every month.

Besides, the oil companies lose Rs33.54 per litre on kerosene and Rs412 per 14.2-kg cooking gas (LPG) cylinder.

"It is estimated that every one rupee depreciation of Indian rupee against US dollar increases the under-recovery (loss) of the public sector oil marketing companies on sale of diesel, PDS kerosene and domestic LPG by about Rs7,900 crore per annum," he said in the note.