lndianOil Bottomline Slides 47% in FYI2 on Tax Dues, Revenue Losses
Kolkata   29-May-2012

State-run IndianOil has reported 47% drop in its net profit at Rs 3,955 crore in 2011-12 because of Rs 8,157 crore disputed state tax payment, revenue losses on petrol and rising interest burden.

Company's chairman RS Butola ruled out any partial rollback of recent petrol price hike and said the oil companies would reduce its rates only if international prices of petrol maintains the downward trend and rupee gets strengthened by June 1. State refiners had raised petrol price by Rs 7.54 a litre last week that was protested by allies of the UPA government.

"We would like to pass on 50 paise, 70 paise, 90 paise, whatever we gain to the consumer in the next pricing cycle," Butola told reporters while announcing company's financial results of previous fiscal year. State oil companies are expected to pair domestic petrol prices with international rates fortnightly, but often this cycle is missed under political pressure.

Butola said IndianOil had to absorb Rs 2,236 crore revenue loss of petrol because the government forced companies to freeze its price for over five months till elections in five states and the budget session of the parliament were over. The government freed pricing of petrol in June 2010, but maintains tacit control in fixing its rates.

IndianOil had to bear an additional interest burden of Rs 2,918 crore because the government did not pay cash subsidy on time, Butola said. The government regulates pump prices of diesel, kerosene and cooking gas and compensates state oil firms for their revenue losses on selling the fuel products below market rates.

"The unprecedented net profit in fourth quarter (2011-12) is because the company received compensation for earlier quarters also," Butola said. IndianOil's net profit in the quarter ended Mar 31 was Rs 12,670 crore, three times more than the net profit in the same quarter previous year. The government paid Rs 45,484 crore cash compensation to IndianOil in 2011-12 for selling regulated fuels below market rates, but company received about 46% of the sum only recently