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Our Bureau

New Delhi, Oct. 30 Fall in crude oil prices has helped Indian Oil Corporation Ltd (IOC) to report a profit in the second quarter of the current fiscal against a loss in the same period previous year.

The company has registered a net profit of Rs 284.36 crore for the quarter.

IOC had reported a net loss of Rs 7,047.13 crore in the same quarter last fiscal. The drop in crude price has helped IOC cut losses on fuel sales. The company has to sell auto and cooking fuels at a Government controlled price.

The net sales dipped to Rs 60,392.90 crore during the quarter (Rs 74,322.01 crore). Speaking to media persons after the company’s board meeting, Mr B.M. Bansal, Director - Planning and Business Development, IOC, said, “The under recovery on account of non-realisation of market related prices for PDS kerosene and domestic LPG for the quarter was Rs 4,175 crore against Rs 4,950 crore in the same quarter last fiscal.”

The oil bonds would have boosted the profit further. The company has not been issued any oil bonds for the first half of the current fiscal for losses on sale of cooking fuels.

As retail selling prices were not revised in line with the international prices, IOC has suffered under realisation of Rs 7,135.50 crore during the first half on sale of kerosene and domestic LPG.

IOC has received discounts on crude oil and products purchased from ONGC, GAIL, Oil India and CPCL of Rs 2,028.18 crore towards the under recovery incurred on sale of auto fuels for the first half of the current fiscal.

The company’s gross refinery margin (GRM) or the difference between the cost of crude oil and price of the refined product for the quarter stood at $3.62 a barrel against a negative margin of $4.03/bbl in the previous corresponding quarter. Average gross refining margins for the period April-September 2009 was $5.42 a barrel ($6.36/bbl).

IOC’s borrowings as on September 30 stand at Rs 47,912 crore. The company has oil bonds worth Rs 24,300 crore.

For the first half of the current fiscal IOC’s net profit stood at Rs 3,967.19 crore. In the same period last fiscal the company had made loss of Rs 6,632 crore.

More Stories on : Financial Performance | Petroleum

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