Indian Oil Corp’s Q1 loss narrows to Rs3,093 cr on government compensation

Indian Oil Corporation (IOC), the country's top retailer of auto fuels, has reported a lower net loss of Rs3,093 crore for the April-June 2013-14 quarter, helped by government compensation for sales losses.

IOC had reported a net loss of Rs22,451 crore in the year-ago quarter.

The government compensation for selling fuel below market cost has helped IOC to limit under-recovery on subsidised sale of fuels to Rs1,212 crore as of 30 June, against under-recoveries of Rs17,485 crore as of 30 June 2012, said RS Butola, chairman of the company.

During the first quarter of the current financial year, IOC said it lost Rs13,625 crore on selling diesel, domestic cooking gas and kerosene at a government-controlled price. Against this, it received Rs8,152 crore from upstream companies (ONGC, OIL, GAIL), while the government has assured to pay cash compensation of Rs4,261 crore.

IOC said it is still left with uncovered losses of Rs1,212 crore.

Besides the under-recovery that has not been compensated for, IOC said, it suffered an exchange rate loss of Rs840 crore and provisioning of Rs400 crore for employee arrears.

Oil marketing companies have been the worst sufferers of the rupee fall and IOC said it suffered a foreign exchange loss of Rs4,024.10 crore in first quarter of 2013-14 against a Rs3,187.01 crore loss in the comparable quarter of the previous year.

IOC's refining margin stood at $4.23 a barrel for the quarter ended 30 June 30 against a negative $2.25 in the comparable quarter last year.

IOC said for the first time it also realised positive margins for the petrochemical business.

''We had a petrochemical margin of Rs779 crore in Q1 compared with Rs256 crore a year ago,'' Butola added.

IOC proposes to raise around $500 million through a syndicated loan by end of this month.