Higher interim dividend target likely for oil PSUs

The finance ministry has indicated that public sector oil companies should this year "replicate" last year's interim dividend payout to the government.

This implies that oil PSUs will be asked to pay around Rs 2,687 crore to the government as interim dividend during the current fiscal.

However, at a recent meeting of the finance, petroleum and disinvestment ministries, the petroleum ministry had said oil companies might register a drop in their net profits this year, after the finance ministry asked for a higher interim dividend to shore up its finances.

The petroleum ministry said last year oil companies' profits were unusually high because of the high refining margins enjoyed by oil marketing and refining companies, and the high international prices of crude oil because of the Iraq war.

The latter helped upstream oil companies get international prices for their produce.

However, immediately after the Iraq war ended this April, refining margins and international oil prices dropped, hitting the bottomlines of oil firms.

During 2002-03, oil companies had nearly doubled their combined net profit to Rs 23,254.6 crore from Rs 12,708.9 crore in 2001-02. Oil and Natural Gas Corporation registered a record Rs 10,000 crore net profit while Indian Oil Corporation's profit more than doubled to Rs 6,115 crore.

The profits of the privatisation-bound Hindustan Petroleum jumped 95 per cent to Rs 1,537 crore during the year, Bharat Petroleum's profits rose 47 per cent to Rs 1250.3 crore, and GAIL (India) Ltd's net rose to Rs 1,639 crore.