State-owned Indian Oil Corp (IOC) today reported a
net profit of Rs 9,611 crore in the quarter ended September 30, after the
government paid a lumpsum fuel subsidy. The company had posted a net loss of Rs
7,485 crore in the same period a year ago.
IOC, which reported the largest quarterly net loss by a
corporate in the June quarter at Rs 22,451 crore as it did not get any fuel
subsidy from the government, received a lumpsum Rs 16,094 crore compensation
for the first half a couple of days to enable the company to make profit in Q2.
"The compensation we received is short of Rs 29,729
crore that was needed to bridge the gap between retail price and cost,"
IOC Chairman R S Butola told reporters here. After accounting for assistance
from upstream firms like ONGC, there is still an unmet revenue loss of Rs
13,635.16 crore, he said.
For the first half (April-September) of the current fiscal,
it has reported a net loss of Rs 12,839.60 crore. IOC and other state-owned
fuel retailers Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp
Ltd (HPCL) sell diesel, domestic LPG and kerosene at government controlled
rates which are way lower than cost. The losses they incur are met through a
combination of cash subsidy from the government and assistance from upstream
firms like ONGC. Butola said the companies currently incur Rs 9.84 per litre
loss on diesel, Rs 31.30 a litre in kerosene and Rs 478.50 per 14.2-kg LPG
cylinder.
"At current prices, IOC will end the fiscal will an
under-recovery (revenue loss) of Rs 86,357 crore. Industry will have an
under-recovery of Rs 161,000 crore," he said. The company's borrowing have
jumped to Rs 96,000 crore from Rs 75,447 crore at the end of March, he said.
The profits were also higher because of higher refining
margin. IOC earned USD 5.15 on turning every barrel of crude oil into fuel in
July-September quarter as against a gross refining margin of USD 2.76 per
barrel a year ago. The company in the first quarter had a negative GRM of USD
4.81 per barrel.
"If the cash subsidy we received is prorated, the loss
in Q1 would have come down to Rs 13,504 crore," he said adding similarly
the July-September quarter profit should have been only Rs 664 crore. If all
the under-recovery was met by the government, IOC would have posted a net loss
of Rs 4,966 crore in Q1 and Rs 5,761 crore net profit in Q2.
Net sales rose to Rs 105,791.29 crore in July-September
quarter from Rs 81,409.96 crore in the same period last fiscal.
Source: www.moneycontrol.com
Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd
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