Indian Oil sees red as daily losses mount to Rs320 crore

14 April 2008

Mumbai: Indian Oil Corporation Ltd (IOC) the country's biggest refiner, is facing a cash crunch with daily losses from subsidised fuel sales rising to Rs320 crore ($80 million) amidst rising prices of crude oil.

If the situation continues, the refiner may not be able to meet routine expenses  and if this persists for more than a year, its projects may also get derailed, IOC chairman S Behuria said.

"Right now we are able to manage, but if this continues for one more year, we will see investment in our project getting impacted," Behuria said.

IOC also expects to process less crude in the current financial year - around 46.5 million tonnes - as it plans maintenance shutdowns at some of its refineries, its director of finance SV Narasimhan said.

IOC earned $7.7 a barrel from processing crude oil in the three months ended March 31 against $9 a barrel in December, Behuria said. Profit from processing had more than doubled to a ``near record'' $10.43 a barrel in the third quarter from $4.50 a barrel a year earlier.

IOC had also reported a 17 per cent increase in profit at Rs2,090 crore in the three months ended December 31.