|
| IndianOil Q1 loss at Rs 3,388 cr |
| BS Reporter / New Delhi Jul 25, 2010, 00:25 IST |
|
A subsidy of Rs 7,343 crore to consumers saw the country’s largest fuel retailer, state-owned IndianOil Corporation (IndianOil), post a net loss of Rs 3,388 crore during April-June 2010, its first loss after five quarters. It had reported Rs 3,683-crore profit in the corresponding quarter in 2009-10.
It had reported a record loss of Rs 7,047 crore in the quarter ended September 2008 when global crude oil prices were volatile after rising to almost $150 per barrel.
The company’s gross turnover rose 23 per cent to Rs 77,965 crore from Rs 63,530 crore during the first quarter of 2009-10. According to IndianOil Chairman & Managing Director BM Bansal, the losses resulted from the sale of automobile and cooking fuels below the market price, lower refinery margin and foreign exchange fluctuations.
Just five days before the first quarter ended, the government on June 25 had allowed state-owned oil marketing companies like IndianOil to increase automobile and cooking fuel prices, and announced a market-linked price regime for petrol. The benefit from the increase could not be recorded in the quarter ending June 30, 2010 that saw the benchmark Indian basket of crude oil touch almost $78 a barrel. With the government subsidy also not available, IndianOil and Hindustan Petroleum Corporation Ltd (HPCL) have both reported losses for the quarter. HPCL had yesterday announced a loss of Rs 1,884.29 crore. The third state-owned oil marketing company, Bharat Petroleum Corporation, is also expected to post a loss when it announces its quarterly result on July 30.
IndianOil is able to overcome part of its marketing losses through margins that are made in the refinery business; but the April-June quarter saw its gross refining margin fall to $3 a barrel from $7.36 a barrel during the same period last year. The margins were low also due to the Rs 467.47-crore foreign exchange loss compared to Rs 652.79-crore gain in the same period last year.
Of the total under-recovery (loss on sale of fuel) of Rs 11,014 crore during the quarter, IndianOil was partly compensated by upstream oil & gas companies in the form of discounts totaling to Rs 3,671 crore. “The loss has also been partly offset by Rs 1,727 crore due to nil tax paid for this quarter,” said Bansal.
The company expects to record an under-recovery of Rs 9,000 crore for diesel, Rs 11,600 crore for kerosene and Rs 9,200 crore on sale of domestic LPG at the current retail price if crude oil averages $75 a barrel during the year. Bansal said the company expects crude oil price to hover between $70 and $80 a barrel on weak demand from the US and Europe.
With the freeing of petrol prices, IndianOil is unlikely to account for any loss on the sale of petrol in the coming quarters, though it is yet to decide on the frequency of change in its retail price. “We would not change the retail price if the required revision is in paisa,” he said. During the first quarter, it had recorded a loss of Rs 1,026 on sale of petrol due to non-revision of prices in line with the global trend.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
