Oil PSUs may post first-ever loss in Q1

Oil giants Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (BPCL) are likely to post their first ever loss in the first quarter of the current fiscal as a result of government dictats not permitting domestic fuel prices to move in tandem with rise in costs.

IOC may end the April-June quarter with a net loss of Rs 1800 crore unless upstream firms - Oil and Natural Gas Corp (ONGC), Gail India and Oil India (OIL) - and private refiners - Reliance Industries (RIL) and Mangalore Refinery and Petrochemicals (MRPL) - share part of the Rs 9,500 crore under-realisation on sale of petrol, diesel, LPG and kerosene.

BPCL would post a net loss of about Rs 1,300 crore while HPCL may report around Rs 1,050 crore loss in Q1. IBP may see Rs 400 crore loss, industry officials said.

"Even if last year's policy of ONGC, Gail and OIL picking up one-third of the projected revenue loss on LPG and kerosene was continued and a similar policy applied for petrol and diesel, the public sector oil firms will still end up in red," the officials said.

With petrol being under-priced by Rs 2.25 per litre and diesel sold at Rs 4.69 a litre loss, the retailers lost Rs 4,700 crore in revenues in April-June. Under-realisation on LPG and kerosene was Rs 4,800 crore.

The official said the situation might be salvaged if Reliance and MRPL are also asked to share the revenue loss.

S V Narasimhan director (finance) of IOC said profitability of the Fortune 500 company in Q1 was largely dependent on the subsidy sharing scheme the government would evolve.