The Hindu Business Line : Price cap pushes IOC under-recovery to Rs 7,132 cr

Indian Oil Corporation (IOC) has taken a Rs 7,132-crore hit for the year ended March 31, 2006, due to the Government cap on retail prices, Mr N.G. Kannan, IOC's Director-Marketing told newspersons on Wednesday. With the inclusion of IBP, the net under-recovery is Rs 7,996 crore.

In April, the `under realisation' is expected to touch about Rs 2,200 crore, he said.

The under-recovery for the last fiscal took into account all subsidies as well as oil bonds received from the Union Government, he pointed out.

Due to steep increases in global oil prices, IOC has been selling diesel, petrol, kerosene and LPG below market prices to control inflation. IOC's earnings from crude processing is expected to fall to $4.5 per barrel this fiscal from $ 6.3 in the last fiscal, Mr Kannan said.

For 2006-07 the capital outlay is Rs 2,350 crore, of which Rs 1,100 crore is earmarked for retail business, Rs 750 crore for LPG business, Rs 350 crore for operations and Rs 150 crore for other activities, he said.

Mr Kannan said that under the retail business Rs 500 crore was allocated to set up 1,000 new retail outlets and 1,000 new Kisan Seva Kendras. These kendras will cater to the fuel needs of rural areas. The outlets would be located in villages that do not have fuel stations. For the automation of retail outlets another Rs 75 crore have been allocated.

For third party certification and expansion of the highway fuel stations, which also offers a range of non-fuel services, Rs 525 crore have been allocated.

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