Indian Oil net drops 46% to Rs 1287 cr

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Indian Oil Corporation (IOC) reported a 46 per cent drop in its net profit in the third quarter owing to a net underrecovery of Rs 2,124.96 crore on sale of petroleum products during October-December 2004.

The company's net profit fell to Rs 1,287 crore during October-December 2004 compared with Rs 2,404 crore during the corresponding period last year. This was despite a 17.8 per cent rise in gross earnings to Rs 39,529 crore during the third quarter of the current financial year.

The impact of the under-recovery was partially offset by a Rs 1,064 crore receipt from the Oil and Natural Gas Corporation, GAIL India and Oil India, which shared the subsidy. IOC's net profit fell 22 per cent for the nine months to Rs 3,999 crore against Rs 5,155 crore previous year.

Chairman and managing director M S Ramachandran told reporters that there was no underrecovery from petrol during the three months, while the company suffered an underecovery of Rs 511.37 crore for diesel, Rs 1207.43 for kerosene and Rs 917.53 crore for cooking gas.

The company estimates that it will be left with Rs 7,566.80 crore underrecovery for the full year though the impact on its profit will be lesser since one third of loss would be shared by Oil and Natural Gas Corporation, GAIL Ltd and Oil India Ltd. Ramachandran said the company would do better in the fourth quarter ending March 31, 2005.

The fall in international prices over the last two months and with the company not cutting the retail prices for petrol and diesel, it had an over recovery of Rs 546.50 crore in the two products during January.

It continued to suffer underrecovery in kerosene and LPG which stood at Rs 856.29 crore during the month. The company suffered Rs 6,805.75 crore underrecovery during the 10 months ending January 31, 2005, of which Rs 5854.22 crore was account of LPG and kerosene.