State-owned Indian Oil Corporation (IOC) on Saturday reported a net loss of ₹272.35 crore for July-September despite booking over ₹10,800 crore of LPG subsidy it received from the government after the quarter ended.

The net loss of ₹272.35 crore compares to a profit of ₹6,360.05 crore in July-September 2021, according to a company's filing with the stock exchanges.

The decline comes on the back of a ₹1,992.53 crore loss incurred in the previous April-June quarter. This is the first time that IOC has booked losses in two straight quarters - all because it sold petrol, diesel and cooking gas (LPG) at rates below cost.

The loss in the second quarter of the current fiscal was despite accounting for ₹10,801 crore of one-time grant that the government had announced on October 12.

The government on October 12 extended a one-time grant of ₹22,000 crore to three state-owned fuel retailers to cover the losses they incurred on selling domestic cooking gas LPG below cost in two years starting June 2020.

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An official explained that though the subsidy was provided by the government after the quarter had ended but it was for the period up to September 2022 and so it was considered following the principle of 'accrual-based' accounting.

"The company had suffered under-recoveries from the sale of domestic LPG in the financial year 2021-22 and in six months ended on September 20, 2022. To compensate for under-recoveries, the Government of India has recently approved a one-time grant of ₹10,801.00 crore. This grant has been recorded under revenue from operations in financial results for the period April- September 2022," IOC said in the filing.

IOC, as well as other state-owned fuel retailers, had booked heavy losses in the first quarter of the current fiscal and did not revise petrol, diesel and cooking gas LPG prices in line with the cost to help the government contain runaway inflation.

The three firms, who are supposed to revise petrol and diesel prices daily in line with the cost, haven't changed rates for over six-and-half-months now - the longest freeze in rates since fuel pricing was deregulated.

In April-June (the first quarter of 2022-23 fiscal), IOC booked a net loss of ₹1,992.53 crore.

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For the first half of the current fiscal, the company has now accumulated a ₹2,264.88 crore net loss against a profit of ₹12,301.42 crore in the year-ago period.

This was despite a record refining margin of $25.49 per barrel during April-September compared to $6.57 a barrel in the same period last year.

"The core gross refining margin (GRM) or the current price GRM for the period April-September 2022 after offsetting inventory loss/gain comes to $22.19 per barrel. However, the suppressed marketing margins of certain petroleum products have offset the benefit of an increase in GRM," IOC said.

Revenue from operations soared to ₹2.28 lakh crore in July-September from ₹1.69 lakh crore a year back, the filing showed.

IOC sold more petroleum products domestically in Q2 (21.56 million tonnes versus 18.93 million tonnes last year) and refined more crude oil (16.09 million tonnes as opposed to 15.27 million tonnes in Q2 of FY22).

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However, exports were down to 0.86 million tonnes in July-September from 1.24 million tonnes in the same period last year. This is possibly because the government slapped a windfall profit tax on the export of petrol, diesel and ATF beginning July 1.