Losses hurt growth plans: IndianOil
New Delhi   16-May-2008
Higher crude oil prices and subsidized sale of petroleum products will limit borrowing capacity of the PSU oil companies adversely affecting their expansion plans, said IndianOil chairman’s Mr S. Behuria. To offset these losses, he suggested a small increase in the price of the petroleum products, a reduction in excise and customs duties and a selective subsidy to LPG. He was here to address Chennai Petroleum Corporation Ltd's (CPCL) financial performance meet. Mr Behuria, who is also the chairman of CPCL, said that despite the Center’s oil bond packages, the public sector oil companies have to bear an under-recovery of Rs 16,700 crore in their balance sheet. He said the oil companies had an under-recovery of Rs 77,000 crore but the finance ministry reduced this figure to Rs 70,000 crore. The Centre had provided oil bonds for Rs 35,300 crore only, while upstream oil companies would compensate Rs 23,000 crore, the remaining amount will have to be met by the oil companies. He said IndianOil alone would have to bear Rs 9,600 for 2007-08. With crude oil price revering around $125 per barrel, he said the current year would be more difficult for the oil companies. Mr Behuria also said that the country couldn't have high growth rate and higher subsidy simultaneously. CPCL, a group company of Indian Oil, has posted the highest-ever turnover of Rs 32,889 crore for the fiscal 2007-08, a growth of 12 per cent. Net profit for the year was Rs 1,123 crore (Rs 565 crore), a growth of 98 per cent. The board has declared an interim dividend of 50 per cent and recommended a final dividend of 120 per cent, making the total divided outgo to 170 per cent for 2007-08.