New Delhi, Jan 18 (PTI) State-run Indian Oil Corp (IOC)today said it will report net loss in the third quarter endingDecember 31, unless the government compensates it for revenueloss due to selling auto and cooking fuel below cost.
"Q3 will see net loss if compensation is not there," IOCChairman B M Bansal told reporters here.
The company lost about Rs 8,500 crore on selling diesel,domestic LPG and kerosene below cost in the October-Decemberquarter. One-third of this may be made up by upstream firmsOil and Natural Gas Corp (ONGC) and Oil India Ltd but for therest it is dependent on the government.
IOC, which last week raised petrol price by Rs 2.50 alitre after international crude prices touched USD 92 perbarrel, is losing Rs 6.80 per litre on diesel, Rs 18.66 perlitre on kerosene and Rs 366.28 per 14.2-kg LPG cylinder.
The government has so far not given any compensation tothe three state refiners - IOC, Bharat Petroleum and HindustanPetroleum, for 2010-11 fiscal.
"For the full fiscal, we estimate an under-recovery(revenue loss) of Rs 40,600 crore," he said adding even lastweek''s hike in petrol price was lower than the desired Rs 3.72a litre increase needed to make domestic rates at par withtheir imported cost.
"Our effort is not to fully load consumers (with steepprice hikes) in anticipation that crude oil prices will softendown in future," Bansal said.
IOC, BPCL and HPCL together are projected to lose Rs73,600 crore in revenues this fiscal, 55 per cent of which theoil ministry wants to come from the union budget. Anotherone-third would be made good by the upstream firms and theremaining would be absorbed by the fuel retailers.
The three fuel retailers currently lose about Rs 290crore a day in revenues on selling diesel, domestic LPG andkerosene below the imported cost.
Oil Minister Murli Deora had on January 8 met FinanceMinister Pranab Mukherjee to seek immediate release of Rs10,000 crore in interim compensation to state oil companies.
So far, the finance ministry has committed to make uponly one-third of the revenue losses from the budget. For thefirst half, it has sanctioned but not released, Rs 13,000crore. Another, Rs 10,000 crore would help oil firms avoidreporting net losses in Q3.
The government had in 2008-09 given Rs 71,292 crore, outof the Rs 103,292 crore total revenue loss on selling fuelbelow cost. This was 69 per cent of the total under-recovery.