State-owned Indian Oil Corp (IOC) today reported a net profit of Rs 9,611 crore in the quarter ended September 30, after the government paid a lumpsum fuel subsidy.
The company had posted a net loss of Rs 7,485 crore in the same period a year ago.
IOC, 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 Rs 16,094 crore compensation for the first half a couple of days to enable the company to make profit in Q2.
"The compensation we received is short of Rs 29,729 crore that was needed to bridge the gap between retail price and cost," IOC Chairman R S Butola told reporters here.
After accounting for assistance from upstream firms like ONGC, there is still an unmet revenue loss of Rs 13,635.16 crore, he said.
For the first half (April-September) of the current fiscal, it has reported a net loss of Rs 12,839.60 crore.
IOC and other state-owned fuel retailers Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) sell diesel, domestic LPG and kerosene at government controlled rates which are way lower than cost. The losses they incur are met through a combination of cash subsidy from the government and assistance from upstream firms like ONGC.
Butola said the companies currently incur Rs 9.84 per litre loss on diesel, Rs 31.30 a litre in kerosene and Rs 478.50 per 14.2-kg LPG cylinder.
"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.
The company's borrowing have jumped to Rs 96,000 crore from Rs 75,447 crore at the end of March, he said.
The profits were also higher because of higher refining margin. IOC earned USD 5.15 on turning every barrel of crude oil into fuel in July-September quarter as against a gross refining margin of USD 2.76 per barrel a year ago.
The company in the first quarter had a negative GRM of USD 4.81 per barrel.
"If the cash subsidy we received is prorated, the loss in Q1 would have come down to Rs 13,504 crore," he said adding similarly the July-September quarter profit should have been only Rs 664 crore.
If all the under-recovery was met by the government, IOC would have posted a net loss of Rs 4,966 crore in Q1