Mon Jan 29, 2007 8:22 PM IST
NEW DELHI (Reuters) - Indian Oil Corp. reported on Monday it made a net profit of 10.6 billion Indian rupees ($240 million) in its fiscal third quarter, helped by the issue of government oil bonds after suffering a net loss in the same period the previous year.
The government has so far issued around 191 billion rupees to state-controlled refiners to partially compensate them for selling oil products below market cost.
"Profit for the quarter was higher due to accounting of oil bonds towards under-realisation on the sale of oil products. Last year bonds were issued towards the end of the financial year and hence were not accounted (for)," Chairman S. Behuria told reporters.
State-run oil marketing companies sell gasoline, diesel, kerosene and domestic cooking gas at government-fixed prices.
He said IOC is making a gross margin of 1.89 rupees on the sale of a litre of gasoline, while it is suffering a revenue loss of 0.26 rupees per litre on diesel.
The company is losing 14.89 rupees on every litre of kerosene sold and 150 rupees on a cylinder of cooking gas.
Behuria expects IOC to maintain profitability in the next quarter if global crude oil prices continue to remain at current levels and government support in the form of oil bonds stay.
S.V. Narasimhan, Indian Oil's finance director, said the government would soon issue refiners with 50 billion rupees of oil bonds, of which IOC's share would be 25 billion rupees.
During April-December, IOC accounted for oil bonds worth 97 billion rupees in its balance sheet.
He said IOC's daily revenue loss due to the caps on fuel prices was expected to drop to 350 million rupees in the January-March quarter from 400 million rupees recently.
Behuria said IOC's gross refining margins in the October-December quarter rose to $4.50 a barrel from $3.40 a barrel a year ago.
"Our refining margins were good as our Gujarat, Mathura and Panipat refineries operated at higher capacities during the quarter," he said.
IOC's refinery throughput during the quarter rose to 11.65 million tonnes from 9.86 million tonnes year ago.
India's largest refiner expects to maintain its borrowings in the current financial year at last year's level.
As at the end of December IOC's borrowings stood at 258.46 billion rupees while in the previous financial year they were 264.04 billion rupees.
"We expect to maintain our borrowings at last year's level", Behuria said.
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