Indian Oil Corp net profit up 34% in Q3 on govt cash dole, higher margins
IOC, the country's largest fuel retailer by sales, said that its net profit for the October-December quarter climbed to Rs 3,331.96 crore, from Rs 2,488.44 crore from the year-ago period.
The firm earned USD 6.15 on turning every barrel of crude oil into fuel in the quarter as compared to USD 5.15 a barrel gross refining margin in the year ago period, IOC Chairman R S Butola told reporters here.
IOC has seen a turnaround in refinery margins this fiscal when it began with a negative USD 4.81 per barrel margin in fist quarter.
Butola said company's borrowings have risen by about Rs 20,000 crore in first nine months to current fiscal to Rs 94,908 crore.
"In nine months (April-December), our interest cost was Rs 5,005 crore. This compares to Rs 5,600 crore interest payout in the full 2011-12 fiscal. In 2010-11, our interest cost was only Rs 3,600 crore. Interest is a big burden today and is increasing every day as the company borrows to meet the deficit on fuel sales," he said.
IOC and other retailers well diesel, domestic LPG and kerosene at a rate much lower than their cost of production.
The government meets less than half of the losses and that too not on a regular basis, forcing the companies to resort to borrowings to meet even working capital requirement. The
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