The Hindu Business Line : PSU oil cos in the red

FOR the first time, IOC, the country's largest refiner, has reported a net loss. First-quarter results released today showed a net loss of Rs 54.23 crore, compared with net profit of Rs 1,472 crore during the corresponding previous period.

According to Mr S. Behuria, Chairman, this will impact expansion plans and compel it to review all new investment proposals.

Giving the reason for the loss, Mr Behuria said, "This is mainly due to under-realisation of Rs 3,194.52 crore on sale of petrol, diesel, LPG, and kerosene during the first quarter against Rs 1,786 crore last year, consequent to non-revision of retail selling prices in line with international prices."

Mr Behuria said that the under-realisation on the four sensitive petroleum products was after ONGC and GAIL (India) Ltd chipped in with Rs 1,674.67 crore as subsidy, without which IOC's losses would have been close to Rs 1,000 crore.

Sales for the quarter went up by 19 per cent to Rs 42,393.45 crore from Rs 35,627.09 crore last year.

Petrol is being sold at Rs 3.63 a litre below the cost, while diesel is under-priced by Rs 4.15 a litre, Mr Behuria said, adding that LPG is being sold at a loss of Rs 92 per cylinder.

IOC is losing Rs 11 on sale of every litre of kerosene.

Borrowings up by Rs 2,000 cr: IOC's borrowings since March have seen a significant rise. They have risen by Rs 2,000 crore to Rs 19,000 crore, Mr S.V. Narasimhan, Director (Finance) IOC, said. The net loss of Rs 54.23 crore for Indian Oil Corporation came after a fringe benefit tax charge of Rs 19.57 crore.

When asked whether the company would be pushing for offloading its stake in ONGC and GAIL (India), Mr Narasimhan said, "we would like to unwind our stakes in both the public sector companies."

The company's gross refinery margins were marginally lower at $6.16 a barrel compared with $6.87 per barrel last year, he said. IOC has sold 11.85 million tonnes of petroleum products in the domestic market, besides exporting 0.55 million tonnes in the first quarter of 2005-06. Its seven refineries together achieved a throughput of 9.18 million tonnes and the pipelines network transported 11.13 million tonnes of crude oil and products.

Regarding the talks with Reliance Industries about discount on LPG and kerosene, he said that the negotiations were going on. Last fiscal, the company got Rs 150 crore of discount on about 3.4-3.5 million tonnes of LPG and Kerosene it bought from Reliance.

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