The loss was after taking credit for oil bonds worth Rs 7,536 crore during the quarter. The last quarterly loss posted by the company was in the quarter ending June 2005.

(Click here for table "IOC: SLIPPING ON SUBSIDIES")

For the full year, the Fortune 500 company (Ranked 135) posted a net profit of Rs 6,963 crore, down 7 per cent from last year's net profit of Rs 7,499 crore.

The company declared an annual dividend of 55 per cent. Sales during the year were, however, at an all-time high of Rs 2,47,479 crore, up 12 per cent on year, though lower than the 20 per cent growth recorded in 2006-07.

IOC Chairman Sarthak Behuria said "profitability of the company is severely affected" as it suffers a loss of Rs 300 crore per day on account of selling the four subsidised products – diesel, petrol, kerosene and LPG.

"If nothing happens, in six months, we will run out of money," he said. IOC, along with the other government-owned companies, has been demanding an urgent relief package from the government. "If nothing is finalised in the next few week, there will be trouble, that is a shortage," said Behuria.

Some parts of the country are already feeling "the pinch" in supplies, he added.

The net under-realisation on account of these sales, after accounting for the oil bonds issued by the government and the discounts by the upstream companies, was up more than four-fold to Rs 9,774 crore in 2007-08 against Rs 2,190 crore last year.

Besides high oil prices, under-realisations are also rising owing to a huge increase in demand for diesel from the non-transport sector, where it is replacing fuel oil and naphtha at power plants.

Diesel demand has also been rising for the government-owned companies as Reliance Industries has stopped feeding the domestic market.

Behuria said that he intends to "restrict sales (of diesel) to reasonable levels. I am not prepared to import diesel to meet demand, and make a loss". The company's capital expenditure has already started taking a hit. "Other than ongoing projects, we are not looking at any new projects," he added.

The largest ongoing project – a Rs 45,000 crore refinery-cum-petrochem project at Paradip – has been split so that only the refinery, estimated to cost Rs 30,000 crore will come up first.