The loss is three times IOC's previous largest loss of Rs 7,485 crore
State-owned Indian Oil Corp today reported the nation's biggest quarterly net loss by a listed company at Rs 22,451 crore as the government failed to compensate it for a record losses on fuel sold at controlled rates.
"The losses (in April-June) are primarily because we did not get Rs 22,451 crore in government subsidy," IOC Chairman R S Butola told reporters here.
This is the biggest quarterly loss ever by a listed corporate. Perhaps this is the largest ever loss by a company in a full year. The loss is three times IOC's previous largest loss of Rs 7,485 crore registered in Q2 of 2011-12 fiscal.
IOC and other state fuel retailers sell deisel, domestic LPG and kerosene at government controlled rates which are way below market price. Besides, they are also forced to sell petrol -- a commodity decontrolled in June 2010 -- at a loss because of inflationary concerns.
"We had a net loss of Rs 22,450.95 crore in April-June quarter as compared to Rs 3,718.70 crore loss in the same period a year ago," Butola said.
The company is losing Rs 1.37 per litre on petrol besides Rs 12.13 a litre on diesel, Rs 28.54 on kerosene and Rs 231 per 14.2-kg LPG cylinder, he said.
The government's failure to compensate for fuel loss has led to IOC's borrowings going up by a massive Rs 15,000 crore in the quarter to Rs 90,923 crore.
IOC can borrow a maximum of Rs 110,000 crore and if losses were to continue that borrowing limit will soon be reached, after which it will not get any finances impacting the company's ability to buy crude oil from international markets, Butola said. The company's debt-equity ratio has deteroriated ato 2.57:1.
Also, its capital expenditure will have to be purned.
"As of now capex funding has been tied-up. Overall if financial constraints continue to play in remaining part of the year, there is bound to be impact," he said.
IOC, Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) together are projected to lose Rs 177,715 crore on sale of diesel, domestic LPG and kerosene in the current fiscal. Another Rs 6,813 crore is projected to be loss on petrol sales which is not compensated by the government.
"our plea with the government is that if we are not allowed to raise petrol price due to inflationay concerns, the product should be brought under control and subsidy provided," he said adding if the government had in 2011-12 fiscal made good Rs 138,000 crore of fuel losses then another Rs 4,890 crore loss on petrol last fiscal too could have been compensated.
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