New Delhi: India’s largest oil marketing and refining company, Indian Oil Corporation (IOC) posted a loss of Rs7047 crore in the second quarter due to reasons such as sale of fuel below cost, foreign exchange losses and inventory losses.
Similarly, state-owned petroleum refiner and marketer Hindustan Petroleum Corporation Ltd (HPCL) posted a net loss of Rs 3,218.92 crore for the three months to September, swinging from a net profit of Rs853 crore in the year-ago period. This was due to high crude prices during the quarter and the firm’s inability to pass on the cost to consumers because of sales at government mandated rates.
The government owned oil marketing companies including Bharat Petroleum Corporation Ltd (BPCL) posted an overall loss of Rs12891.19 crore for the second quarter of the year.
IOC had posted a net profit of Rs3,818 crore in the three months ended 30 September last year, the state-owned company said. Turnover rose 46.5% to Rs79,528 crore from Rs54,292 crore a year earlier. “We may take a further hit on account of inventory losses,” said chairman Sarthak Behuria. “However, after a long time we will have a positive margin of around Rs4 on petrol sale from tomorrow based on the average crude price of second fortnight of October,” he added.
IOC lost Rs3,578.95 crore due to foreign exchange variation and Rs12,271.03 crore as under recovery crore during April-September. Under-recovery is an industry term for selling refined petroleum products below the cost of buying crude oil. The losses were after including Rs14,473.54 crore subsidy sharing by upstream companies such as Oil and Natural Gas Corp and Oil India Ltd and Rs25,082.38 crore oil bonds from the government.
IOC also stands to lose around Rs300 crore on account of easing the immediate financial concerns at loss-making domestic airlines by allowing them to square up in six equal instalments dues of Rs2,962 crore owed to state-run oil firms with no interest levied.
In a related devlopment, the OMCs are expected to cut the jet fuel or aviation turbine fuel by Rs6,000 per kilo litre from midnight.