State-owned Oil cos dismiss 'false impression' of huge profits

In an unusual joint statement, Indian Oil Chairman R S Butola, Bharat Petroleum Chief R K Singh and Hindustan Petroleum CMD Subir Roy Chowdhry said contrary to the false impression of oil marketing companies (OMCs) making huge profits in 2011-12, the oil firms had "incurred huge losses of Rs 15,100 crore in the first nine months (Apr-Dec 2011)".

The statement came in response to a letter by Overseas Indian Affairs Minister Vayalar Ravi to Oil Minister S Jaipal Reddy saying the claim made by oil companies that they are running in loss seems to be untrue in view of the profits they reported in fourth quarter ended March 31. Ravi in the letter stated that IOC made a profit of Rs 12,670 crore in January-March quarter and BPCL Rs 3,962 crore.

It, however, said the three oil firms had reported a net loss of over Rs 15,100 crore in first three quarters which was being ignored in making such statements.

"The companies incurred losses due to sale of three products, namely diesel, domestic cooking gas LPG and PDS kerosene at highly subsidised prices," the statement said.

"It is only after the assistance (subsidy) of Rs 83,500 crore from the government and Rs 55,000 crore (grant) from the upstream oil companies (ONGC, OIL and GAIL), totalling Rs 1,38,500 crore, the three public sector OMCs could declare nominal profits," it said.

Had this assistance not been given, the three OMCs would have reported a combined loss of Rs 1,32,000 crore, it said. (MORE)