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| IndianOil's revenue may slip by Rs 28,000cr |
| BS Reporter / New Delhi Dec 08, 2009, 00:44 IST |
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Indian Oil Corporation, the country’s largest petroleum marketing company, expects revenue loss of Rs 27,000-28,000 crore for selling fuels below cost price by the end of their current financial year, in March 2010.
The combined loss of the domestic industry on the four products is expected to be over Rs 45,800 crore in the current year. “Refinery margins have come down and we are yet to get bonds to make up for the under-recovery on Liquefied Petroleum Gas (LPG) and kerosene,” said Sarthak Behuria, chairman and managing director of the company.
He added that it was currently losing Rs 94 crore every day on selling petrol, diesel, domestic LPG and kerosene below cost price. Fuel retailers IOC, Hindustan Petroleum Corporation and Bharat Petroleum are currently selling petrol Rs 3.68 a litre lower than the cost and diesel at Rs 2.90 per litre below the cost.
These companies are also incurring a loss of Rs 18.13 a litre on kerosene and Rs 250.67 on each domestic LPG cylinder.
The three companies have so far not been given oil bonds for the losses incurred selling kerosene and LPG since the beginning of the current year.
Behuria was, however, hopeful of receiving the bonds soon. “We have written to the petroleum ministry and we understand that they have taken this up with the ministry of finance,” he said. IndianOil is expected to get over Rs 11,800 crore worth of oil bonds for the first three quarters of the current year.
The losses made by selling petrol and diesel are to be met through contribution from upstream companies like Oil and Natural Gas Corporation.
IOC to have up to 49% stake in N-plant with NPCIL
Indian Oil Corporation would take up a 26-49 per cent stake in the Rs 10,000-crore nuclear power plant it will set up in collaboration with the Nuclear Power Corporation of India Ltd (NPCIL).
"We have signed a memorandum of understanding for setting up at least one 1,000-Mw nuclear power plant with NPCIL," said B M Bansal, the company's director of planning and business development. While NPCIL will be the operator and take at least 51 per cent stake in the plant, IOC could take up either 49 per cent or 26 per cent interest, he said.
"The nuclear power plant will cost Rs 8-10 crore per megawatt but the good thing is that we get 15.5 per cent return on investment, and cost of electricity generation is low — about Rs 3-4 per unit," he said.
The company may have to invest between Rs 1,000 and 1,500 crore as equity in the project with NPCIL.
Bansal also informed that the oil refiner is looking at buying Liquefied Natural Gas (LNG) from Africa and Australia to feed the proposed LNG import terminal at Ennore in South India. Work on the 2.5-million tonne terminal was put on hold in 2007 after huge gas finds off the east-coast made the project economically unviable.
"In the next two to three months, we will take a decision if Ennore LNG terminal project is to be revived," Bansal said. "Talks are in preliminary stages and nothing has been finalised yet." If a decision is taken to revive it, the terminal should be ready by 2012, by when Reliance Industries’ Krishna-Godavari D-6 field achieves peak production of 80 mscmd.
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