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Deep into red: Mr Sarthak Behuria, Chairman, IOC, at a press conference in the Capital on Friday. - Kamal Narang

Our Bureau

New Delhi, Oct 31

Indian Oil Corporation Ltd (IOC) has registered a net loss of Rs 7,047.13 crore for the second quarter of the current fiscal against a net profit of Rs 3,817.75 crore in corresponding quarter of pervious fiscal.

IOC has suffered a quarterly net loss for the second time. The last time it made a loss was in fourth quarter of 2007-08.

“Increase in net under-realisation along with foreign exchange loss due to rupee depreciation, inventory valuation losses due to falling crude oil prices, and increased expenditure on account of rise in interest rates as well as increase in borrowings are the main reasons for such a huge loss during the quarter,” Mr Sarthak Behuria, Chairman, IOC, said.

He said that the under-realisation on sale of petrol, diesel, cooking gas, and kerosene for the quarter stood at Rs 4,951 crore. The revenue loss on account of forex fluctuation was Rs 1,048 crore and inventory loss including re-valuation of the stock stood at Rs 4,600 crore.

For the first time after a long gap, IOC expects to make profit on sale of petrol from Saturday due to fall in global crude oil and product prices.

“Margins on petrol will turn positive from Saturday. Based on the average oil price of second fortnight of October, we expect to make Rs 4.12 a litre margin.” The oil marketing companies will continue to make losses on diesel, cooking gas and kerosene.

“While losses on diesel will come down to Re 0.96 a litre, on kerosene we continue to lose Rs 22.40 a litre, and on LPG, the losses stand at Rs 343.49 a cylinder,” Mr Behuria said. “IOC will now continue to lose Rs 85 crore daily on sale of diesel, kerosene and LPG.

For first half, IOC incurred a loss of Rs 6,632 crore as against profit of Rs 5,286.16 crore for the same period last fiscal. The losses were despite the company receiving Rs 14,473.54 crore by way of discounts on purchase of crude oil and products from companies like such as ONGC, Oil India and GAIL (India), and Rs 25,082.38 crore by way of oil bonds from the Government.

"Consequent to non-revision of retail selling prices in line with international prices, the company has suffered net under-realisation of Rs 12,271.03 crore during April-September," Mr Behuria said.

IOC's gross refining margins (GRM) declined for the first half due to negative impact of $4.08 a barrel on account of inventory valuation. The average GRM for first half was $6.36 a barrel ($ 8.44 a barrel). The GRM for the second quarter was negative to the extent of $4.03 a barrel due stock losses.

More Stories on : Financial Performance | Petroleum | Forex

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