Indian Oil logs first losses in nine quarters
Friday, 30 May 2008, 05:20 Hrs
New Delhi: Forced to retail transport and cooking fuels at below costs, Indian Oil Corp, the country's largest refiner, Wednesday reported its first losses in nine quarters amidst warnings that fuel may be rationed if a decision on prices is not taken soon. The Fortune 500 company reported losses of 4.14 billion ($97 million) for the three-month period ended March 31, against profits of 15.03 billion for the like period of the previous year. The losses were incurred despite a 33-percent rise in net revenues to 717.9 billion from 538.18 billion, the company informed the Bombay Stock Exchange in a mandatory filing. For the financial year as a whole, Indian Oil Corp reported a profit of 79.13 billion from 78.67 billion for 2006-07. Net revenues grew to 2.32 trillion from 2.03 trillion, the company said. The company's board has recommended a dividend of 55 percent, despite the losses sustained in the last quarter of the previous fiscal and no indications yet from the government transport and cooking fuel price hikes will be allowed. "We have taken a call. We have to restrict sales to a reasonable level," warned Behuria at a press conference here, indicating some form of rationing of these products. "Obviously, we are not going to import at a loss," he added. State-run oil marketing companies, who have been prevented from raising prices of transport and cooking fuels have already warned that they will soon run out of money to buy oil products for retail if immediate measures were not taken. India Oil chairman Sarthak Behuria said his company had requisite funds only till September to buy crude oil at the present rate - ruling at around $135 per barrel - but still sell it at a loss. Top government functionaries, meanwhile, continued their meetings to discuss the various options, including the core group of ministers, led by External Affairs Minister Pranab Mukherjee. But the meeting, which included Planning Commission Deputy Chairman Montek Singh Ahluwalia, Finance Minister P. Chidambaram, Petroleum Minister Murli Deora, ended inconclusively. Deora had said Tuesday, after his meeting with the finance minister that one of the proposals that could be discussed was some sort of a surcharge on income tax and corporate tax to help fund the losses of oil marketing companies. But the finance ministry said a day later that no such move was on the cards. "The reports are largely speculative, and in particular, reports about certain new tax proposals are totally baseless," the ministry's statement said. India had last raised prices on Feb 14 after nearly 20 months.