Indian Oil expects Rs73,605-cr loss as borrowings rise to Rs79,000 crore
13 Dec 2011
Public sector giant Indian Oil Corporation (IOC), which has seen its borrowings rise to over Rs79,000 crore, expects to end the fiscal with a record loss of Rs73,605 crore.
R S Butola, chairman, today told reporters that the company is losing Rs227 crore every day by selling diesel, kerosene and domestic LPG at below market rates.
IOC, along with the other two state-owned oil marketing firms - Bharat Petroleum and Hindustan Petroleum - is forced to sell fuel (except petrol) at controlled rates. The three firms lose Rs13.53 on the sale of every litre of diesel, Rs29.99 on a litre of kerosene and Rs287 on the sale of a 14.2-kg LPG cylinder.
The three state undertakings are expected to lose a record Rs137,605 crore in the fiscal ending 31 March 2012, because of under-recoveries.
However, with parliament passing the Appropriation bill - allowing the government to incur an additional expenditure of Rs63,000 crore - on Tuesday, Butola was hopeful that the government would give about Rs16,000 crore as compensation for the under-recoveries. The government will have to pay Rs30,000 crore to the three oil refiners as compensation.
While crude oil prices continue to rule at over $100 a barrel, the woes of the oil refiners have worsened with the sharp fall in the Indian rupee. On Tuesday, the rupee closed at a record low of 53.23/24 to the dollar, after hitting a lifetime low of 53.29 (See: Rupee hits 53.40 a dollar as stock markets turn choppy). The slide in the value of the rupee has made crude oil imports dearer for the three firms.
