Indian Oil posts Rs 22,451 crore loss

The government is yet to compensate the state-run oil marketing major Indian Oil Corporation (IOC) for its under recoveries to the tune of Rs 17,485 crore, owing to which the PSU oil major on Thursday suffered the highest ever loss of Rs 22,451 crore in the first quarter of the current financial year, against Rs 3,719 crore  loss in the same period previous fiscal.

“Our unmet realisation of Rs 17,485 crore on sale of high speed diesel, kerosene (sold through the public distribution system) and LPG or cooking gas in the absence of sanction of budgetary support from the Government remains a matter of concern. We have taken our case to the government are  yet to receive a compensation for the under recoveries,” RS Butola, Chairman, IOC told reporters while announcing the company’s first quarter results here on Thursday.

IOC’s pervious biggest ever loss was to the tune of Rs 7,485 crore in the second quarter of September 2011.

The oil major loses nearly Rs 12.13 when it sells per litre of diesel, Rs 1.37 per liter by selling petrol, Rs 28 on when it sells a litre of kerosene and Rs 231 when it sells a LPG cylinder to its customer.

Butola said that it was deliberating with the government if it could hike the price of petrol to mitigate the under recoveries from sale of petrol.

On being asked if the oil marketing company was contemplating a further hike in the prices of petrol Butola said “The price of per barrel of crude had gone up to $126, IOC’s foreign exchange losses were to the tune of Rs 3,187 crore,” without elaborating further.

IOC’s borrowing for working capital had gone up to Rs 90,923 crore where as its working capital borrowing limit is about Rs 1,10,000 crore.

To a query whether the lenders including banks and FIs would be willing to extend loans if the working capital loan limit was breached, Butola said, “They should not look at us on a Q-o-Q basis but they should see our annual results,” he said.

“If we get the reimbursement for the under recoveries, that will be the easiest solution for us,” he said.

Regarding over dues from oil companies the company informed that only National Civil Aviation Company or Air India owed Rs 2360 crore to IOC of which Rs 1228 crore was old outstanding dues while the interest component was Rs 364 crore.

“NACIL is already on cash and carry and it is yet to pay its bills due for July 7, July 22 and August 7.”

On being asked if there was a case for hiking diesel prices as more and more car users opting for diesel vehicles because of high prices petrol, a senior IOC official said “you know these are political decisions. Whenever government tells us we will do the needful.”