Indian Oil profit falls 285 percent to Rs.70 bn (Lead)

October 31st, 2008 - 5:00 pm ICT by IANS  

New Delhi, Oct 31 (IANS) India’s largest oil marketing company, the state-run Indian Oil Corp, has slipped into the red in the second quarter due to the depreciation of the rupee and falling petroleum product prices.In a regulatory statement, IOC said profits dropped 284.6 percent, when compared to last year’s second quarter figures of Rs.38.17 billion.

In the period under review, oil prices spiralled to as high as $147 mid-July, but have since been falling and hovering around a little over $60.

According to IOC, the under-recovery from the sale of subsidised transport fuels and cooking gas was Rs.12.27 billion in the second quarter. This is four times the under-realisation of Rs.3.5 billion in the corresponding period last year.

The average gross refining margin has also come down to the to $6.36 a barrel from $8.44 a barrel last year.

“Refining margins during the April-September 2008 are lower mainly due to negative impact of $4.08 per barrel on account of inventory valuation against $ nil (zero-dollar) during April-September 2007,” said a company statement.

To help it recoup its under-realisation, the state-run upstream company Oil and Natural Gas Corp (ONGC) has granted IOC discounts of Rs.14.4 billion for the second quarter.

IOC has also been allocated oil bonds worth Rs.25.08 billion from the government, but this is yet to be received.

Petroleum Minister Murli Deora Thursday met Finance Minister P. Chidambaram to ask for a higher quantum of oil bonds for oil marketing companies, on account of massive losses in the second quarter.

The income has, however, increased from Rs.574.18 billion to Rs.869.87 billion this year - a rise of over 51.4 percent.

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