Four oil PSUs combined net profit up 20%

The consolidated profit of four oil companies have gone up by Rs 1,824.5 crore or 20 per cent during 2003-4 even as three of them posted decline in net profit for the last quarter (Q4) of last fiscal.

With the Centre holding on to the retail price ahead of the election during January-March when benchmark Nymex WTI crude oil prices soared to $37 from $32 at the beginning of 2004, profits declined by Rs 434.2 crore or 13 per cent.

During Q4 of last fiscal, Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) posted decline in profit even as their top line grew by Rs 4056.5 crore or 6.7 per cent. On year-on-year basis, their net topline grew by Rs 17,398.4 crore or 8.1 per cent.

The overall financial health of the four would have shown a negative growth had there not been subsidy sharing by upstream major Oil and Natural Gas Corporation (ONGC).

The company doled out Rs 2,063 crore as per the subsidy sharing formula worked out by ministry of petroleum and natural gas in December 2003.

"The incremental growth in profit for 2002-03 would have wiped out completely and turned negative if the subsidy was not there. This indicate that high refining margin did not offset the loss in retail of petrol, diesel, cooking gas and kerosne," an oil industry expert said.

In fact, pure marketing company such as IBP which did not have any cushion of refining margin, would have been hurt seriously without the subsidy.

In fact, the first quarter of this fiscal may spring up surprises as global crude oil price ruled around $ 40 a barrel for the most part. It touched a 13-year high on fear of supply disruption in the middle east.