IndianOil to start rationing fuel supplies
Mumbai   29-May-2008
Baulking at the prospect of higher petrol and diesel prices? Be prepared for long queues atpetrolpumps. IndianOil, after announcing a 7.1% dip in its net profit in 2007-08 on Wednesday, said it has decided to start restricting supplies of petrol and diesel to pumps. IndianOil chairman & managing director Sarthak Behuria said sales of petrol and diesel will nowbe inline only with what is available domestically, without resorting to imports, especially of diesel. IndianOil has been importing diesel and LPG to meet domestic demand. However, with the prices of international crude oil and petroleum products hitting record highs, Behuria said IndianOil would be left with no money to import fuel. IndianOil is the country's largest fuel retailer with 17,642 petrol pumps. "The market may start feeling the pinch. I am not saying there will be dry-outs at pumps, but, yes, there may be queues. Southern India is already reporting queues at petrol pumps. The oil companies cannot continue meeting the demand unrelentingly and have to take acallsomewhere," he said. The IndianOil chairman made it clear that if fuel prices are not hiked and duties not reduced, the company would run out of cash to import crude by the end ofSeptember. IndianOil loses Rs 300 crore a day on the sale of petrol, diesel, LPG and kerosene and has postedanetloss ofRs 414.3 crore in the fourth quarter of fiscal 2007-08, against a profit of Rs 1,609.67 crore in same period the previousyear. Despite recording a new high ofRs2.5 lakh croreinsales inFY08,upl2.1%fromFY07's Rs 2.21 lakh crore, IndianOil's PAT fell by 7.1% to Rs 6,963 crore in 2007-08. Crude prices are ruling at over $130 a barrel in the international market, and the company loses Rs 16.34 a litre on sales of petrol, Rs 23.49 on diesel, Rs 28.72 on kerosene and Rs 305.90 a cylinder on LPG.