IndianOil may post net loss of Rs 5,800 crore in FY09
New Delhi   20-Aug-2008
IndianOil is likely to end the current financial year with a net loss of Rs 5,800 crore because of widening losses on fuel sales, while Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) may each see losses of Rs 7,000 crore and Rs 5,500 crore, respectively. At the meeting called by Petroleum Minister Murli Deora to review the financial health of oil companies, it was stated that the total revenue loss on sale of petrol, diesel, LPG and kerosene would touch Rs 1, 80,000 crore in the current year. Of this, oil bonds worth Rs 95,000 crore are expected from the government, while upstream companies such as ONGC would chip in Rs 45,000 crore. At current crude price of $115 per barrel, fuel retailers IndianOil, BPCL and HPCL would end the year with net losses. "The fall in crude prices is a happy sign," Petroleum Secretary RS Pandey said after the meeting. The government would make good of the under-realisation in revenues on fuel sales through oil bonds. "For the first quarter the finance ministry has agreed to give oil bonds for 50 per cent of the 48,865 crore revenue loss on fuel sales," he said. Bonds for the first quarter of the current financial year and those for the last quarter of 2007-08 would be issued to IndianOil, BPCL and HPCL after the Parliament approves supplementary budget. Deora said the supplementary budget would be approved in the next session of Parliament that is likely in September-October. Officials said IndianOil, BPCL and HPCL have sold most of their bonds under the RBI's special market operations (SMO) scheme. IndianOil is to get Rs 7,536 crore bonds for January-March quarter and Rs 13,527 crore for the April-June quarter. Similarly, BPCL is to get Rs 3,971 crore and Rs 5,766 crore for the two quarters, while HPCL is entitled to Rs 3,448 crore and Rs 5,115 crore bonds for the period. IndianOil, BPCL and HPCL are losing Rs 450 crore per day on sale of petrol, diesel, LPG and kerosene. The retailers are losing Rs 7.07 per litre on petrol, Rs 16.22 on diesel, Rs 39.55 on kerosene and Rs 348.89 per 14.2 kg LPG cylinder.