IOC profit jumps over two-fold to Rs 1,634 cr
New Delhi   11-Feb-2011

IndianOil on Thursday reported a two-fold jump in net profit at Rs 1,634 crore for the quarter ended December 31. Net profit was up 134.7 per cent to Rs 1,634.76 crore from Rs 696.59 crore in the same period a year ago.

The profit was higher on the release of Rs 4,442 crore of cash subsidy by the government to make up for half of the revenues it lost on selling diesel, domestic LPG and kerosene below cost during the quarter.

Elaborating on the results, IOC chairman SV Narasimhan said the announcement of the results was delayed due to late release of government subsidy.

The company’s net profit during April-December was down 24 per cent at Rs 3,540 crore compared with Rs 4,664 crore in the same period a year ago.

While petrol prices were freed in June, state oil firms continued to sell diesel, domestic LPG and kerosene at prices substantially lower than the cost of production.

IOC under-recovery (losses) at present amounts to Rs 8.20 a litre on diesel, Rs 20.56 a litre on kerosene and Rs 356 a cylinder on LPG. On the Rs 20,000 crore follow-on public offer (FPO), Narasimhan said it was delayed further due to unfavourable market conditions and rising global crude oil prices.

“We had planned the FPO in June but volatile crude prices in September-October and because of high inflation, I don't think it is feasible at this stage to think of an FPO,” he said.

“There is no timeframe (to launch the FPO) at the moment,” he said, adding the company is still awaiting government approval for the stake sale.

Following the stake sale, the government’s holding in IOC would reduce to 64.57 per cent from the existing 78.92 per cent. The twin share sale programme was expected to garner close to Rs 20,000 crore.

The company indicated on Thursday that it would wait till 2011 budget on February 28 to take a call on hiking petrol prices even as global crude prices remained volatile in recent weeks. “I hope the crude prices would come down to avoid another hike in the oil prices in near future,” Narasimhan said, making a case for a cut in import duty on crude oil in the budget.