Buoyed by government subsidy, three government-owned oil marketing companies (OMCs) — Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) — on Friday reported net profits for the second quarter (July-September).
IOC reported a net profit of Rs 9,611 crore against the loss of Rs 7,485 crore in the same period last year. Revenues from sales rose 30 per cent to Rs 105,791 crore.
The company, which reported the largest quarterly net loss by a corporate in the June quarter at Rs 22,451 crore, as it did not get any fuel subsidy from the government, received a lumpsum of Rs 16,094 crore as compensation earlier this week. “The compensation we received is short of Rs 29,729 crore that was needed to bridge the gap between retail price and cost (in the first two quarters),” IOC Chairman R S Butola told reporters.
“At current prices, IOC will end the fiscal will an under-recovery (revenue loss) of Rs 86,357 crore. Industry will have an under-recovery of Rs 161,000 crore,” he said, adding that the company's borrowings have jumped to Rs 96,000 crore from Rs 75,447 crore at the end of March.
Another OMC, BPCL, reported net profit of Rs 5,035 crore in the second quarter, compared to loss of Rs 3,229 crore in the same period last year. Revenue from sales rose 34.5 per cent to Rs 56,859 crore. It got Rs 7,280.30 crore as compensation from the government. For the April-September period, its unmet under-recovery stood at Rs 6,133 crore.
HPCL has reported net profit of Rs 2,327 crore in the second quarter, against loss of Rs 3,364 crore in the year-ago period. Revenue from sales rose 31 per cent to Rs 48,464 crore. The company will receive Rs 6,667 crore as compensation from the government, leaving it with unmet revenue loss of Rs 5,648 crore.
The three companies sell diesel, kerosene and domestic cooking gas (up to six per consumer) at government dictated rates. The loss incurred in the process is compensated by a mix of government subsidy and cash discounts offered by ONGC and OIL on crude sales to oil marketers.