Financial Daily from THE HINDU group of publications
Tuesday, Oct 18, 2005
Financial Daily from THE HINDU group of publications Tuesday, Oct 18, 2005 |
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Corporate
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Outlook IOC expects to make profit in Q2; IBP set to post losses Our Bureau
Mr S. Behuria, Chairman, Indian Oil Corporation.
New Delhi , Oct. 17 WHILE Indian Oil Corporation expects to return to profitability in the second quarter of the current fiscal, its subsidiary IBP Co Ltd is unlikely to post profit. IBP is likely to report a net loss of about Rs 400 crore, the IOC Director Marketing, Mr N.G. Kannan, said. IBP posted a net loss of Rs 234 crore in the first quarter, he said adding that IBP was suffering losses as it does not have refining margins to offset losses on sale of petrol, diesel, LPG and kerosene. Addressing a press conference on the liquefied petroleum gas (LPG) supply scenario, the IOC Chairman, Mr S. Behuria, said, "IOC was underselling petrol by Rs 4.46 per litre and diesel by Rs 5 per litre. LPG was being sold at a loss of Rs 121 per cylinder and kerosene at a loss of 13.93 per litre." The total under-recoveries suffered by IOC for April-October 2005 was Rs 5,000 crore on kerosene and LPG, and Rs 3,483 crore on petrol and diesel. The under-recovery on LPG was Rs 1,500 crore for the period. LPG imports: The LPG import plans of the oil companies are finalised taking into consideration the projected growth in demand as well as the planned production numbers from various LPG producers in the country, Mr Behuria said. "On behalf of the oil industry, IOC has firmed up term contracts for import of 2.1 million tonnes of LPG during January-December 2005, against 1.9 million tonne during the same period last year," he said. The short-fall in actual LPG production by various producers, particularly in August-September, coupled with the rescheduled shut-down of the Reliance Industries Ltd's refinery for 45 days from October 4 has, however, changed the demand-supply scenario, Mr Behuria said. This has resulted in a shortfall in availability of domestic LPG during the peak demand months of October to December, he said. To meet demand apart from sprucing up its dealer mechanism, the company felt the need for additional imports of LPG. In addition to 46 term cargoes during October-December, it was assessed that there was an additional requirement of 27 cargoes for meeting the market demand and maintaining comfortable inventories, as the RIL refinery will be shut down till November 20. Out of these 27 additional cargoes, IOC has contracted 15 against term contracts and through spot tenders to offset the cooking gas shortage in the country, Mr Behuria said. He said lower LPG production by the refineries and a 45-day shutdown at the Reliance Jamnagar refinery had necessitated an additional import of 3,51,000 tonnes of LPG in October-December. Of this, two lakh tonnes has already been contracted and the remaining is on the verge of being tied up, he said. LPG backlog: "The backlog in supply of domestic LPG, which developed following the September 22 flash strike, has been liquidated and supplies were available off the shelf," he said "I would like to assure that there is no supply constraints now as we have made up for the backlog by working overtime on Sunday and the Dusshera holidays," he said.
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