IOC posts worst-ever quarterly results; may shut down refineries

Indian Oil Corp, the biggest of the three state-owned oil marketing companies, on Wednesday announced its worst ever quarterly results, with a net loss of Rs7,485.55 crore in the second quarter ended 30 September, and suggested it may have to close down some refineries as it lacks money to import crude.

''Our debt-equity ratio is 1.66. We have a debt of Rs73,000 crore in our books. If the situation does not improve, we may not be left with money to import crude from the international market and we will have to shut some of our refineries,'' said IOC chairman and managing director R S Butola.

The loss for the second quarter is in sharp contrast to a profit of Rs5,294 crore notched up in the same quarter of the previous year.

''The loss is mainly on account of an increase in unmet under-recoveries and increase in interest expenditure,'' said IOC in a statement. Despite raising petrol prices 13 times in the past one year, the company had to absorb Rs7,800 crore of unmet losses on the sale of diesel, domestic LPG and kerosene at government-dictated prices. The company has not received any subsidy compensation from the government in the current fiscal.

''The finance ministry needs to pay us Rs23,000 crore as compensation for the first two quarters, but we have not heard anything from them till now,'' said Butola.

IOC had capital expenditure plans of Rs14,800 crore for the fiscal. ''We will review this by end-December or by the first week of January, and if our borrowing continues to remain high, we will cut the capex plan,'' said P K Goyal, director, finance.