IOC defers results with finmin mum on subsidy
Mumbai   25-Jan-2011

IndianOil (IOC) has deferred announcement of its financial results for the quarter ended December.

"The same would now be considered by the board at a later date within the stipulated time period," state-owned IOC, which was to report the numbers today, said in a notice to the stock exchanges.

The move is aimed at pressurising the finance ministry into releasing the subsidy amount soon, without which the oil marketer is likely to incur heavy losses for the quarter on account of increasing under-recoveries, or selling fuel below costs.

Indications are the other two state-owned oil marketing companies — Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) —- too will defer their results announcements.

According to the schedule available on the BombayStock Exchange website, HPCL is to declare its results on January 27.

However, a company executive told DNA Money, "We have a board meeting on 27th, but 99% we will delay the result declaration like IOC. We are waiting for the final word from the finance ministry for the subsidy sharing amount for the third quarter."

The three oil marketers are losing about Rs. 290 crore a day in revenues on selling petrol, diesel, liquefied petroleum gas (LPG) and kerosene below cost. Besides petrol and diesel, they are losing Rs. 19.60 a litre on kerosene and Rs. 366.28 per cylinder on LPG.

IOC alone is estimated to have lost about Rs. 8,500 crore during the quarter.

The finance ministry had released Rs. 13,000 crore to cover part of the under-recoveries for the first half of this fiscal.

Oil ministry now wants the finance ministry to release another Rs. 10,000 crore for under-recoveries in the third quarter.

Sans the subsidy money, all three refiners are expected to report losses for the quarter.
The finance ministry had earlier said that it will bear only 33% of the oil subsidy, but in the current fiscal, the burden is likely to be more than that.

The oil ministry has already clarified that upstream companies will not bear more than 33% of the subsidy.