New Delhi: Indian Oil Corp. Ltd (IOC), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL) posted a cumulative net profit of Rs 16,972.88 crore for the three months ended 30 September as the government compensated the state-controlled refiners for selling fuel below market price.
The state-owned firms had posted a cumulative loss of Rs.14,079.23 crore for the same period in the last fiscal.
The operating environment for the firms is marked by uncertainty as they continue to sell fuel below cost and are not sure about the extent to which they will be reimbursed by the government or when.
IOC on Friday announced a net profit of Rs.9,611 crore for the second quarter, compared with a loss of Rs.7,486 crore in the corresponding period last fiscal.
Revenue for the country’s biggest refiner increased 30.12% to Rs.1.06 trillion.
BPCL, in a separate announcement on Friday, said it made a net profit of Rs.5,034.79 crore for the second quarter, compared with a loss of Rs.3,229.27 crore a year earlier. Its revenue increased 34.46% to Rs.56,887.87 crore.
HPCL’s net profit in the second quarter was Rs.2,327.09 crore, compared with a loss of Rs.3,364.48 crore in the same period last year. Revenue from operations rose 32.50% to Rs.49,129.79 crore.
The oil marketing companies (OMCs) want petrol to be included in the so-called administered pricing mechanism—which will entail them for compensation from the government—as they anyway can’t sell petrol at market prices despite the commodity being deregulated.
IOC, HPCL and BPCL are compensated by the government for selling diesel, kerosene and cooking gas at government-fixed prices.
They aren’t compensated for petrol since June 2010, when the government allowed the refiners to fix petrol prices.
The total under-recovery for 2012-13 is expected to be around Rs.1.67 trillion.
IOC chairman and managing director R.S. Butola declined to answer a question about a proposal to increase the supply of subsidized domestic cooking gas cylinders from six to nine.
The Congress-led United Progressive Alliance government in September decided to limit the supply of subsidized cooking gas to households to six a year.
There are 140 million LPG (liquefied petroleum gas) connections in the country, of which 99.57% are for domestic use, comprising 14.2kg LPG cylinders, according to official data.
There are a total of 9,422 LPG distributors in the country and the LPG customer population covers around 56% of the country’s total.
“There has been an increase in the demand of 38% for commercial gas cylinders since the cap on subsidized cylinders have been introduced,” said Makrand Nene, director, marketing, at IOC.
On BSE, shares of BPCL fell 0.28% to close at Rs.338.05 each, while the benchmark index, Sensex, ended 0.86% lower at 18,683.68 points.
HPCL declined 1.78% to Rs.301.45 and IOC fell 1.02% to Rs.262.00.