Petroleum major Indian Oil Corporation has lost Rs 1,302 crore (Rs 13.02 billion) in the sale of petrol and diesel in October-December quarter owing to the high international crude oil price.
N G Kannan, director (marketing), said that IOC is expecting marginal profit in Q3 FY 2005-06 and cumulative loss in all the three quarters.
IOC's third quarter under realisation in diesel is pegged at Rs 1,116 crore (Rs 11.16 billion) and the company has lost Rs 2.16 per litre. In petrol sale, the company has lost Rs 1.87 per litre and under-realisation stood at Rs 186 crore (Rs 1.86 billion).
The company was hit by Rs 177 subsidy in the sale of each LPG cylinder. LPG under-recovery through subsidy stood at Rs 1,454 crore (Rs 14.54 billion).
The subsidy for kerosene was Rs 12. 86 per litre in Q3 and IOC has an under-recovery of Rs 2,259 crore (Rs 22.59 billion) in kerosene sale. In fact, the lower retail fuel prices set by the government is expected to pull down the profit margin of IOC in Q3.
"India is importing 76 per cent of crude oil, which is refined in the country. The price in the international market was hovering at $ 60 per barrel in the international market in October- December period owing to the hurricane attacks and in the fear of production cut by Organization of the Petroleum Exporting Countries. Despite the high crude oil prices, Indian oil majors sold the fuels in low prices, thus the loss was expected," said industry sources.
"IOC is expecting the government to issue a second tranche of oil bonds soon. We had asked for Rs 15,000 crore (Rs 150 billion), of which we got Rs 5,700 crore (Rs 57 billion). Now we expect an equal amount of oil bonds to be issued before March," Kannan said.
The merger of IOC and its wholly owned subsidiary Indo-Burma Petroleum will be completed in between April and June 2006, Kannan said.
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