Firmer rupee, oil bonds fuel Indian Oil profit by 17%

CORPORATE SCORECARD

Indian Oil Corporation (IOC), the country's largest refiner and marketer, has posted a 17 per cent jump in net profit to Rs 2,091 crore from Rs 1,791 during the third quarter of 2007-08 on the back of rupee appreciation, strong refining margins and oil bonds issued by the government.

Gross refining margins during the quarter more than doubled to $10.34 per barrel compared to $4.50 per barrel in the same period last year.

"We have done very well," IOC's chairman and managing director Sarthak Behuria told reporters.

Sales during the quarter were up 13 per cent to Rs 64,726 crore from Rs 57,365 crore in the same period last year. For the nine months ended December 2007, net profit was up 23 per cent to Rs 7,377 crore while gross turnover during the period was up 7 per cent to Rs 177,223 crore.

The net under-recovery during the April-December period for the four subsidised products, Petrol, diesel, kerosene and LPG, was Rs 6,515 crore (after taking credit for oil bonds worth Rs 11,461 issued during the period) against Rs 3,770 crore in the same period last year.

The company, which is losing Rs 172 crore per day by selling these products at subsidised products, has seen an increase in borrowings and a downgrade in ratings. "It is a difficult situation," said Behuria.

The solution is "excise duty relief, higher bonds along with fuel price hike," he added.

IOC sold 46.02 million tonne of products, including 2.59 million tonne by way of exports, during the nine months ended December, 31, 2007, compared with 43.02 million tonne in the same period last year.

The throughput at its refineries was 35.13 million tonne during the period compared with 32.19 million tonne last year. Throughput for its pipelines was 42.26 million tonne against 37.85 million tonne last year.