State-owned Hindustan Petroleum Corporation Ltd (HPCL) today reported a net loss of Rs 3,364 crore for the quarter ended September 30 after the government failed to offer any compensation for the losses it incurred on subsidised fuel sales.
The Mumbai-based fuel retailer had posted a net profit of Rs 2,089 crore for the July-September quarter of the 2010-11 fiscal, HPCL Director (Finance) B Mukherjee told reporters here
"The loss is essentially on account of the under-recoveries (revenue loss) that we had to absorb," he said.
HPCL and the two other state-owned fuel retailers, Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL), sell diesel, domestic LPG and kerosene at rates way below market prices, as dictated by the government. This loss is partially made up by assistance from upstream firms like ONGC and a cash subsidy from the government, while they are required to shoulder the remaining burden themselves.
However, the government has so far not provided any cash subsidy to the fuel retailers for Q2.
"We had a total under-recovery (revenue loss) of Rs 4,686 crore on selling diesel, domestic LPG and kerosene below cost in the July-September quarter. Of this, Rs 1,561 crore came from upstream firms and the rest Rs 3,125 crore had to be booked on our books," he said.
HPCL and its sister public sector retailers currently lose Rs 9.27 per litre of diesel, Rs 26.94 per litre of kerosene sold through the public distribution system (PDS) and Rs 260.5 per 14.2-kg LPG cylinder supplied to domestic households for cooking purposes.
Bharat Petroleum Corp Ltd (BPCL) had yesterday reported a second quarter net loss of Rs 3,229.27 crore, or Rs 89.3 per share, as against a profit of Rs 2,142.2 crore, or Rs 59.2 per share, in the corresponding period of the 2010-11 fiscal.
HPCL's turnover increased by 30% to Rs 39,114.8 crore during the reporting quarter.
The company's domestic sales of petroleum products increased to 13.27 million tonnes in the first half, translating into a growth of 7% vis-a-vis the same period last year, higher than the average growth rate of 4.4% experienced by the industry as a whole.
HPCL's petrol sales rose by 7.1%, while its diesel sales increased by 13.2% in the first half vis-a-vis the corresponding period of the previous year -- the highest growth rate in the industry during this period.
HPCL's refineries at Mumbai and Visakh processed 8.16 million tonnes of crude during the April-September, 2011, period, as against 6.33 million tonnes during April-September, 2010, translating into a growth of about 29%.
